Investment Banking Keeping UK Banks Buoyant

Barclays announce pre-tax profits of £3.95bn for first half of 2010 – up 44% on same period last year. The vast majority of this profit came from the investment arm of the bank. Barclays chief executive said his bank had performed well in difficult conditions “against the backdrop of subdued economic and market activity and the sovereign debt….we have delivered good growth in income and profits.” Other banks had also released data this week with HSBC reporting profits of £7bn and Lloyds at £1.6bn, for the same sixth month period.

Pound Sterling – UK Markets

Today sees the BOE interest rates announcement which is expected to be left on hold for the 17th month in a row. The Bank of England stated that it expects inflation to remain below the 2% target for 2 years and it is unlikely that we will see a rate rise until well into 2011. Analysts are suggesting that the pound may fall against the USD if it fails to break through the resistance level of $1.67. A resistance level is an area where analysts anticipate orders to sell a security and it is suggested that if this level is not met then investors may sell GBP against USD.

US Dollar – US Markets

Growing concern of the pace of the U.S. economy saw the dollar fall against a basket of currencies including the yen. Many of Japans exporters sold out of the currency amongst railing last night.

Euro – European Markets

The euro erased its decline against the dollar to trade little changed at $1.3163 (9:37am). It is currently trading at 1.2030 against GBP 11am GMT and the results of the European stress tests have been well factored in so anyone buying or selling Euros would do well to discuss their requirement with their broker today.

Other Currencies – Highlights

The South African Rand (ZAR) weakened against the dollar over concerns of the business confidence report for July being published today at 11:30am local time. The currency of Africa’s biggest economy decline 0.4 percent to 7.2866 this morning from a close of 7.2552. For a live quote or to tell us about your foreign exchange requirements, please call us on +44 (0)20 7740 0000