Tag Archives: European Central Bank

U.k House Price Drop Continues

The fall in UK house prices gathered pace in January, according to the government’s own house price index. Prices were 11.5% lower than in January 2008, an increase in the 10.2% annual fall seen in December. The price of the average UK property is now down to £195,724, a fall of £26,034 in the past year. Prices have been falling fastest in Northern Ireland, down 14.3%, and are still highest in London, where the average home costs £301,383. Continue reading

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US data better than expected

US data released yesterday showed better than expected retail figures for February, and Bank of America announced that they expect to operate profitably in 2009. This led to a surge in equity markets and a rise in risk appetite for investors with the MSCI world index making its biggest rally since November. Japan and China also signalled an increase in efforts to boost growth leading Asian and European equities higher.

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Limited risk appetite returns

European equities have rallied this morning and the US Dollar has declined as markets regain limited appetite for risk. Sterling however, has been excluded from this rally as it remains battered by weak manufacturing and industrial production figures out this morning. Uncertainty over the stability of the UK banking sector is also putting Sterling under pressure. Continue reading

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U.S Unemployment

Markets returned to risk aversion on Friday as figures out in the US showed unemployment has reached a 25 year high. The Pound is significantly lower against the US Dollar this morning as the government is set to take control of Lloyds banking group. International equities remain risk averse as the World Bank has predicted the global economy will contract for the first time since WW2 due to the current downturn.
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Eyes on MPC

Markets are anticipating the release of interest rate decisions from the Bank of England and ECB this afternoon. Both are expected to make a 0.5% reduction to the current base rate with quantitative easing looking likely for the UK economy in future. It is unclear as yet how this will affect the value of Sterling. Some economists predict added uncertainty will damage the Pound, while others maintain an end to rate reductions could provide support for Sterling. Continue reading

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Market unease continues

Stock markets have recovered from their bout of extreme risk aversion with Sterling and the Euro trimming losses against the US Dollar overnight. Ben Bernanke warned yesterday that the US banking sector is yet to achieve stability and interest rate decision are due from the ECB and Bank of England tomorrow. The prospect of quantitative easing and more unconventional policy is fuelling investor uncertainty which is impacting on currency exchange rates. Continue reading

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Risk Dominates markets

Risk trends remain the primary determinant of currency exchange rates this morning as the US cash injection for AIG yesterday renewed fears of institutional failure. Deemed too big to fail by the US authorities, AIG has received a further $30 billion in Federal funding and is now 77.9% taxpayer owned. Markets plummeted around the world on the back of this news sending the Pound and Euro to the bottom end of their trading ranges versus the US Dollar and Yen. Continue reading

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Sterling under pressure

Sterling is under pressure this morning over losses in the banking sector. Lloyds is yet to strike a deal with the Treasury over inclusion in the Asset Protection Plan and HBOS has announced over £10 billion worth of write downs for 2008. GDP figures out in the US later today will be a source of interest for markets as growth prospects in the world’s largest economy remain a key driver of economic sentiment and currency exchange rates. Continue reading

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Record loss for RBS

The Pound is sitting lower this morning against the Euro and US Dollar after RBS has posted the largest loss in corporate history. The bank which is now 68% taxpayer owned lost £24 billion in 2008. In combination with GDP figures which showed the UK economy contracted -1.5% in the fourth quarter, this news damaged the exchange rate value of Sterling, sending it back to the bottom end of ranges against its international currency partners. Continue reading

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UK GDP contracts -1.5%

Figures released this morning show UK GDP contracted 1.5% in the final quarter of 2008. This takes annual growth to -1.9%; a figure largely in line with market expectations. Wall Street gained over 3% yesterday, the largest gain in a month, after comments from Head of the Federal Reserve Ben Bernanke quelled investor fears over the state of the US banking sector. Continue reading

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