The Pound has sunk against the US Dollar this morning, down 1.24% to trade at the 1.51 level. Sterling has also declined against European and Asian currencies as low market confidence reduces risk appetite internationally.
After having gained 10% last week, the FTSE 100 declined overnight as international news indicates a deepening of the economic slump around the globe. In the UK this morning RBS has softened its repossession policy, agreeing to give pressured mortgagees 6 months grace after defaulting on mortgage payments before repossessing their homes. This morning mortgage approvals for October have fallen to 32 000 after 33 000 in September and consumer credit is up to £0.8 million after a £0.3 reading in September. The Bank of England interest rate decision on Thursday is likely to be the major source of volatility for Sterling this week.
The US Dollar has strengthened against the Pound and Euro overnight as lower commodity prices and a raft of important data released this week have reduced risk appetite internationally. Merrill Lynch has forecast an average price of $43 a barrel for oil in the first quarter of 2009 as global economic downturn reduces demand for the commodity. Henry Paulson and Ben Bernanke are to speak in the US today, giving an economic update which will be an important source of information for markets and the US Dollar.
The Euro has posted mixed results overnight, having gained against the broadly weaker Pound but lost ground against the US Dollar this morning.
Europe's Stoxx 600 made its largest gains since 1987 last week after the announcement of government rescue packages in major economies from Europe to China. Inflation plunged 1.1% in the Eurozone last month giving the ECB greater scope for rate cuts which are due on Thursday. A series of PMI's for manufacturing in the Eurozone are due today and EU retail sales are also due on Thursday.
Interest rate decisions from both the Reserve Bank of Australia and the Reserve Bank of New Zealand are due this week.
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In the midst of another day with little economic activity around the globe, fears of a Chinese...
|South African Rand||18.111|
|GBP indicative mid-market rate at 11:35. Please call for quote.|