Pound Sterling - UK Markets

Sterling was 3% lower against the Dollar and 2% lower against the Euro following the Bank's announcement, trading at 1.4880 and 1.1972 respectively.  This morning the Pound has recovered against the US Dollar to trade in the region of 1.4943.

The Quarterly Inflation report, which shows UK unemployment has risen to 5.8%, or 1.8 million is a 10 year high for the UK. Figures are expected to exceed 2 million by Christmas and this morning brings the news that BT will cut 10 000 jobs by March. Sterling is likely to continue to suffer in the short term as investors favour risk aversion.

There is no major data from the UK for the rest of the week, with the next big market mover being the Retail Price Index on November 18.

US Dollar - US Markets

The US Dollar is enjoying a period of strength at the moment despite negative economic data, supported by its reserve status as investors flock to the safety of US dollars.

The OECD has predicted the US led global recession will mean a 0.3% growth contraction in 2009 for the global economy.

"This is certainly not a V-shaped recession," said Jorgen Elmeskov, acting Chief Economist of the OECD as it appears we will not see recovery until 2010. General Motors is reported to be struggling with asset sales in the US and oil has fallen to $51 a barrel, lowest in 21 months as demand dwindles.

The US trade balance and jobless claims are due later in the day with retail sales data due tomorrow. 

Euro - European Markets

The Euro is enjoying a bullish run against the Pound in light of recent negative economic data emerging from the UK, up 2% overnight and is currently sitting around 1.2493 against the US Dollar.  

This morning brings the news that Germany, Europe's largest economy, faces a growth contraction by 0.5%. This is the largest contraction since 1996 as slower global demand is scaling back export production. The Euro dropped a cent against the US Dollar and European shares slumped following the report.
A series of major announcements are pending in the Eurozone including the EMU Consumer Price index and GDP figures tomorrow.