Monthly Archives: January 2009

Pound gains on Euro

The Pound made significant gains on the Euro overnight as comments from leading speculator George Soros and negative economic data placed the single currency under pressure. US GDP figures out this afternoon are likely to be a source of market volatility as they are expected to show a deep contraction in quarter 4 of 2008. Continue reading

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IMF predicts deep recession

The International Monetary Fund (IMF) announced yesterday that the UK is to be hardest hit by the current recession. Global growth forecasts have been revised down to 0.5% in what is likely to be the worst recession in 60 years. A separate report from the International Labour Organisation (ILO) predicted 50 million people internationally would become unemployed as a result of the downturn. Continue reading

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Sterling under Pressure

The Pound remains under pressure this morning, trading just off recent lows against its major currency partners. Barclay’s shares have risen nearly 40% in response to claims from the Chairman and Chief Executive the bank is operating in good financial health and the Federal Reserve is due to make an interest rate decision later in the week. Continue reading

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UK GDP contracts -1.5%

UK GDP has contracted -1.5% in the fourth quarter, taking annual growth rates to -1.8% confirming an entrenched recession. Growing speculation that the government will have to move to more unconventional policy measures is turning investors away from the Pound, while economic uncertainty internationally is supporting the US Dollar.
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Pound under Pressure

The Pound has continued to slump against the US Dollar reaching 1.36 yesterday, the lowest level since 1985. Sterling continues to be battered by spiralling government debt and the likelihood of more unconventional monetary easing measures from the MPC. Wall Street equities rallied reviving risk appetite internationally, however Sterling remained exempt and suffered against most of its international currency partners.
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Pound Slumps along with Market Confidence

The Pound declined to a 6 year low against the Dollar yesterday as market confidence was shattered by the announcement of the largest profit loss in history from RBS. The EU has revised growth predictions downwards to -1.9% for 2009 and equity markets are awaiting a fiscal stimulus package announcement from the US. Continue reading

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UK Government to Insure Banks

The Government has announced a second series of measures this morning aimed at insuring banks and alleviating toxic assets. Financial think-tank Ernst & Young has predicted UK unemployment is to hit 3.4 million by the end of 2010 and equity markets around the world have staged a minor rally boosted by the announcement of rescue packages in the US and UK.
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ECB cuts to 2%

The ECB reduced its base interest rate to 2% yesterday in a move that was widely expected by markets. A volatile day of trading saw Bank of America shares lose over 20% and the London FTSE 100 also closed with significant losses. Consumer inflation and industrial production figures from the US are likely to be the major market movers today.
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ECB Decision Due

The ECB is under pressure to reduce the cost of borrowing today following a sharp reduction in industrial production in the Eurozone. The Euro is weaker this morning ahead of the decision and the Dollar has been supported overnight by underlying bearish market trends. Continue reading

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US Trade Balance Reduced by 28.7%

The US trade balance released yesterday showed a sharper than expected reduction, by 28.7% due to reduced consumer demand and the lower price of oil. This supported the US Dollar internationally at the expense of the Pound and Euro.
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