The currency blog

The final group game for England was a vital must-win clash against Slovenia. We decided to show our support for the home side by having the game on the screens in the office, and by wearing football shirts (for a donation to charity of £1 of course). A couple of people even sported a St Georges cross on their faces courtesy of Barbara and her face paints!

An extra £20 was raised on the day which will be split equally between this months charities. Some photos from the afternoon are below:

An action shot - was it a goal… nooooooooooo its offside!

Rooney hits the post!!

All over - 1 - 0 to England - roll on Germany in the next round on Sunday!

Chancellor George Osborne’s produced the toughest Budget in a generation yesterday with Britain facing drastic cuts of 25% to government departments. The exception will be those departments with “protected budgets,” such as the National Health Service and foreign aid. Other key take outs include an increase in the VAT from 17.5% to 20% from January next year and a new £2 billion levy on the banks. The budget reveals a more rapid fiscal response than that planned by the previous Labour government. The Chancellor said, “This emergency budget deals decisively with our country’s record debt.”
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George Osborne will today unveil the Conservatives plans for cutting the UK’s deficit with a “tough, but fair” emergency budget. The announcement will set the tone for the next 5 years as the Government aims to reduce the shortfall in the countries finances. The widely expected tax hikes include an increase in capital gains from 18% to 40% while VAT also looks set to rise to 20% from 17.5%. Duty on cigarettes, alcohol and fuel are also likely to go up. On the plus side, the Tory chancellor is likely to increase the income tax threshold by £1,000 giving the lowest earners a £200 tax break, though this will be factored out of higher income workers. Banks are bracing themselves for a levy that the Government is hoping will raise over £3bn. Reforms in public sector pay and welfare benefits will be the key to making reductions in spending. The City will be watching this very closely for any comments or announcements from the chancellor likely to move the markets.
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The announcement by the Chinese of an end to a fixed exchange rate regime, allowing the remminbi to appreciate, has given stocks, commodities and risk-on currencies a boost in early trading. Investors moved out of the safe haven USD with Cable reaching 1.49 before falling back slightly and the Aussie Dollar also performing well on the back of the news. The move by the Chinese is wildly seen to be a political rather than economic one. With the G20 meeting coming up shortly and the current ‘currency manipulation’ bill working it’s way through the US congress, the decision to let the Yuan have a much greater degree of flexibility sends a positive message to the Americans. The markets have open higher as the announcement has released some of the pressure that was building and any potential trade dispute between the US and China is much less likely. As well as the G20 meeting, the Chinese may have had one eye on pre-empting the forthcoming US Treasury report on FX polices of US trading partners. Tim Geithner may have been ready to single out China explicitly – not something the ruling party in China needs or wants as it tries to gradually integrate China into the world economy. Read the rest of this entry »

Another very quiet session to round off the week in Asia. We saw a bit of risk-averse trading early in the session, which has been the typical play on Friday’s as traders avoid risk heading into the weekend. This mood has eased and most pairs are closing the session near their opening levels. Cable fell as low as 1.4645 but improved to a high of 1.4857 post solid UK retail sales figure out yesterday. Sales rose 4.4% as electrical retailers enjoyed increased sales ahead of the World Cup football tournament. In addition to strong sales, vehicle production increased by 59% suggesting that the economic recovery from recession is continuing for a third quarter.
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Last night, in the Chancellors annual speech at the Mansion house, George Osborne outlined his widely expected plans to abolish the FSA. Mr Osborne believes that the FSA, which as part of the tripartite arrangement along with the Bank of England & Treasury, was at the root of Britains problems during the financial crisis. The Bank of England will assume responsibility for ensuring financial stability, with the handover completed in 2012. He also announced the first details of a planned bank levy to be announced in the emergency budget on Tuesday.
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