Pound Sterling - UK Markets

Sterling is significantly lower this morning, 1.6879 against the US Dollar and 1.2440 against the Euro as the IMF noted that Britain could be one of the countries worst hit by the global downturn.  

Equity markets have also dived overnight in accordance with the general trend throughout Europe, the US and Asia.

Fuelling Sterling's decline are UK goods trade figures which came in at -£8.2 billion deficit yesterday, beating the conservative estimate of -£7.6 billion. The total trade balance was at -£4.7 billion, largely due to reduced exports and contraction in the goods and services sector. Flow on effects of these figures have led to worse than expected unemployment, the government and department of work and pensions are bracing themselves for difficult months to come.
 
Brown has called for ‘global solution' to the financial crisis as Darling is in Washington to meet with the G7 group. The UK government has also frozen Icelandic assets in Britain under anti-terrorism laws, apparently furious at Icelandic failure to protect British investments.

The market is yet to respond positively to the governments nationalisation package and at present the trend is towards US Dollars as markets continue to be characterised by fear and flighty investors. 

US Dollar - US Markets

US share markets have seen the worst week since 1970, shedding $900 billion overnight. Flow on effects have also been seen in London, Tokyo and Australia which all suffered major losses.

The US Dollar is holding relatively strong due to its status as a safe haven and the flight towards gold as copper and oil commodity prices drop away. Oil is still searching for a bottom and is hovering in the vicinity of $82 a barrel, making a production cut likely from OPEC.

The US trade balance is due today and the group of G7 ministers meets in Washington.

Euro - European Markets

The Euro was up against its major currency partners, with the exception of the US, Australian and New Zealand Dollars.

European share markets suffered in accordance with their global counterparts and the ECB made available $100 billion today to banks strapped for liquidity.