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Looking at the markets this morning the euro has started on the back foot. The reason for the fall in the euro is due to banking fears again creeping into the scene. The European Central Bank has warned that the region may face another €283 billion of losses by the end of next year and it seems that the skeletons are still appearing for Europe’s banking sector. Further writedowns are likely to appear in most major economies, however the scale of the losses in the Eurozone is likely to weigh on the euro going forward. Read the rest of this entry »

The currency markets settled into range trading yesterday as mixed market data continued to cloud the outlook for global economies. Sterling dipped sharply following unexpectedly weak retail sales data which reinforced recent words of caution from the Bank Of England and Mr Darling. The pound managed to claw back most of the losses in later trading and this bodes well for the technical strength of the pound which could see it form a base for a move towards 1.20 against the euro and 1.65 on the USD. Read the rest of this entry »

Can you believe that 3 months have passed already and we needed to have another Big Charity Vote to decide which charities will benefit from the now varied activities we undertake each month!!

The list of 22 charities was made up from suggestions within the office and everyone had a chance to vote for 9 charities, giving a score of 9 for their most favourite down to 1 for their least favourite. There were some clear favourites in the office so I’m expecting a lot of activity over the coming months. Read the rest of this entry »

Following yesterdays’ cautious assessment from the Bank Of England sterling dipped after a good run. The dip in sterling yesterday was not significant (1% against the euro and 0.8% against the USD) but it does dampen recent expectations of targeting 1.20 on the EURO and 1.70 against the USD. Data just released in the form of UK retail sales was much worse than expected falling 0.6% month on month against a forecast of a 0.4% rise … this brings the fall in retail sales to -1.6% on a year on year basis! Read the rest of this entry »

A quick look at yesterday’s movements in the markets saw sterling maintain its trade weighted highs following better than expected CPI data- against the euro we peaked at 1.1860 and recovered against the USD from 1.62 to 1.65 before US data turned the trend. EUR/USD also edged back to 1.39 as the USD was sold off following its previous day gains. Recently we are seeing a market torn between risk appetite and risk aversion- this is dominating the currency markets with flows in and out of the USD and YEN still dictating. Read the rest of this entry »

Yesterday’s cautious note led to a pronounced sell off in the equity markets as fresh concerns over the global economy sparked a sell off. The Nikkei was down 2.5%, the Dow was 2.1% lower and the Nasdaq slumped 2.3%- the fall in the US stocks was the worst slide in a month. It seems the market is now looking for more definitive signs that the economy is improving over sentiment. Weaker regional manufacturing data did not help the markets and also the news of a protestor death in Iran spooked the markets. The USD and the YEN both made gains yesterday with GBP/USD retracing back to 1.62 and EUR/USD back to 1.3750.

The USD is also under scrutiny ahead of the meeting of BRIC leaders- BRIC is an acronym that refers to the fast growing economies of Brazil, Russia, India and China. The leaders are to discuss mutual trade settlements and reserve investment in BRIC currencies. Russian PM Medvedev is calling for the creation of new reserve currencies outside the USD, at the same time Russian finance minister Alexi Kudrin said yesterday that he had confidence in the dollar and that there were no immediate plans to switch to a new reserve currency. Kremlin aide Sergei Prikhodka also noted that BRIC leaders did not intend to discuss new reserve currencies in any great depth. The practicalities of looking for an imminent switch to a new reserve currency would be difficult to achieve but it will be interesting to see if a future plan to diversify away from USD will be discussed. Naturally the USD will lose value on plans/discussion for a new reserve currency.

Sterling is continuing its bull run as data this morning confirms that May CPI rose 0.6% month on month which is stronger than the forecasted 0.3% gain. Some analysts feel this may increase the chance of a rate hike from the Bank Of England, however I think low rates will be on the cards for sometime and the Bank Of England will be nervous of too much inflationary pressure. Sterling is pushing higher against the euro and the USD, however it is back under 160 against the YEN.