The currency blog

Currencies Direct and Lexland abogados working together.

Currencies Direct has secure today a collaboration contract with international law firm Lexland.

Lexland Abogados provides legal services in Spain mainy to non resident clients, offering peace of mind when purchassing property in Spain, assisting existing property owners with further services in the cases of litigation or typical conficts when renting property, taxation in Spain, etc…

Lexland Abogados was founded in 2005 with a commitment from its 4 founding firms to create a company capable of innovation in the delivery of legal services, combining personal attention with high quality and the modern characteristics of a large law firm which currently employs over 90 professionals.

Lexland offers its services to companies, local governments and high net worth individuals across Spain through its network of offices in Madrid, Barcelona, Seville and Marbella. It also has French, United Kingdom, Italian and German international desks to cover demand from its transnational clients in those countries.

For more information, contact: http://www.lexland.es/

Great start to the morning for sterling pushing up against the USD and the EUR as it sterling was largely ignored as the global markets have bigger fish to fry. Tim Geithner the US treasury secretary reiterated his sentiment on a stronger USD; this was supported by the APEC finance minister’s conference which also registered it’s support for the USD and the IMF. However talk is cheap and it is clear that the USD is posing a problem due to recent volatility and weakness. Although the USD gained back from 1.50 to 1.4850 against the euro this move is hardly significant and we can expect further wranglings over the USD during Obama’s visit to China.  Sterling nipped higher on the blindside as the markets focused elsewhere.
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Yesterday sterling weakened after the release of the Quarterly Inflation report and the accompanying speech by Mervyn King. The feedback from King was actually not too bad when taken into context over the last six months; inflation was earmarked to rise and growth forecasts were upped. The reason why the pound weakened was related to the Bank keeping an “open mind” on further Quantitative Easing and also noting that the weaker pound is a key driver for the UK economy. It seems the Bank is still treading tentatively and is taking no chances. We have little data for the rest of the week for sterling; sterling has held firm after falling yesterday holding above 1.10 against the euro and 1.65 on the USD. The market will want to see continued improvements in economic data following small improvements in manufacturing, jobless claims and housing data.
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A busy day in the markets this morning for economic data from the UK. Firstly we kicked off with UK October jobless claims and ILO unemployment rate; the jobless claims came in better than expected and the unemployment level came in at 7.8% against a forecast of 8%. Initially the pound hopped higher towards 1.68 on the USD and 1.12 against the EUR as the market responded to the improvement; however it still had an eye on the Bank of England inflation report to follow. This report was more dovish than anticipated and the door was left wide open for more QE when the markets were looking for signals on a conclusion. King also noted that weaker sterling will help exports indicating that the drop in sterling is not a concern but a benefit. This led to a drop in sterling across the markets and once again the BoE’s dovish tone is holding sterling back.
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… in the Far East just as the currency looked as though it might consolidate at its recently hard won higher levels ahead of the release of the latest Quarterly Inflation Report from the Bank of England and the US public holiday - both tomorrow.

Then at 5:18 this morning, Fitch said that the UK was most at risk of losing its AAA sovereign rating amongst the major economies, with Germany being the least likely. Cable dropped from 1.6755 to 1.6610 without touching the sides and Sterling/Euro witnessed a corresponding fall from 1.1183 to 1.1090 before a recovery of sorts.

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The pound is off to a flyer in particular against the USD hitting 1.68 and pushing to 1.12 against the EUR. Some attention in the markets is focusing on the Kraft/Cadbury developments which is sterling supportive in relation to M & A flows. EUR/USD is also testing the 1.50 level again this morning; Euro zone investor confidence has come in much better than expected with the highest reading since June 2008. GBP/EUR struggling to gain further due to the EUR strength against the USD.

Over the weekend the G20 agreed a new framework aimed at re-balancing the global economy and will present detailed plans by the end of Jan. In the meantime the US dollar is weak and this is leading to a stronger euro and Yen; the IMF have also noted that the USD is still overvalued raising concerns that the USD could weaken further. Targets will be for the euros to hold above 1.50 and GBP/USD to push towards 1.70.

On Friday the non-farm payrolls for the US slipped by a worse than expected 190k and the unemployment level hit 10.2%. This was not good news for the US economy in the short term, although the market may still look forward to a slowly improving employment sector. It was not enough to turn the market into risk aversion and USD strength.