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Of late we have become accustomed to sudden changes in global economic sentiment as the uncertain markets digest every sound bite of economic feedback. This pattern repeated itself yesterday as the risk averse cloud was lifted by bullish comments from analyst Meredith Whitney that banks’ quarterly results may be stronger than expected. This was unusual as this particular analyst is a well known bear and optimism from a bear is more welcomed by investors than optimism from a bull. The impact in the FX markets was directly apparent as the Yen shed its recent gains along with the USD. Looking at the Yen crosses it has weakened from 91.80 to 93 against the USD & to 152 against the pound. The pound and the euro are also advancing against the USD, the former gaining from 1.6050 to 1.63 and the latter testing 1.40 again.

Later today we have highly anticipated earnings data from Goldman Sachs and a good number is now anticipated which could be followed by improved earnings data from other banks and companies later this week- this could continue the move out of the USD and YEN.

In the UK we have had some encouraging data overnight as the latest survey from RICS (Royal Institute for Chartered Surveyors) said that UK property values are set to rise in the next 3 months as a lack of homes props up prices. In addition feedback from the British Retail Consortium identified that sales rose 1.4% in the year to June.

Discuss on this on the Currency Exchange Forum