Pound Sterling - UK Markets
Sterling gained 1-2% against the US Dollar and Euro overnight and is currently enjoying a bullish run after reaching record lows against the Euro last week. The Pound has recovered to 1.50 versus the US Dollar as a series of major announcements this week in the US are weighing on the Dollar.
The short term trend for Sterling remains negative as the intensity of recession in the UK, which is expected to be one of the longest and hardest hit, is anchoring value of the Pound. Yesterday Citigroup announced they are axing 50 000 jobs globally, 15% of their workforce, and speculation of Labour tax cuts is gaining momentum.
The UK Consumer Price Index and Retail Price Index are out this morning, expected to show inflation declining, and the MPC minutes released tomorrow.
US Dollar - US Markets
US Dollar is bearish at the moment, reflecting the negative tone in equity markets after conclusion of the G20 summit. The meeting failed to provide plans to support the rhetoric proffered by global leaders meaning markets are still searching for positive news to fuel gains.
The S&P 500 has declined 42% this year and oil is still sitting in the region of $52-55 a barrel, the price capped by diminishing global demand. The US Producer Price Index is due this afternoon and Bernanke is due to testify on the state of the US economy. A hawkish speech is likely to be positive for the value of the Dollar.
Tomorrow Consumer Price Index and House Starts statistics are due from the US.
Euro - European Markets
The Euro is slightly down against both its major currency partners, at 1.25 to the US Dollar and 0.8387 to the Pound in the absence of major Eurozone data yesterday.
This morning Swiss Retail Sales figures have come in at a surprisingly positive 6.4% adjusted for inflation in September. Construction Output for the EMU is due this afternoon and ECB President Trichet is to speak.