The Queen to outline coalition government laws Her majesty will outline which laws the new government will look to pass over the next year. In other news, GDP Q1 figures have shown a 0.1% increase to 0.3%.

Pound Sterling – UK Markets

Yesterday’s deficit cuts did little to ease growing concerns over the state of the Pound. Although the currency eased 0.6% against the dollar on the back of the Chancellors proposed plans, news coming from the Chicago Mercantile Exchange revealed that speculators are placing huge bets against the Pound. Worries continue to grow over the state of the country’s finances and as suggested , the formation of the new coalition government has done little more than provide us with a couple of weeks of ‘honeymoon period’, which now appears to be over. The impact of the Eurozone debt crisis appears to have stung the UK as it questions the ability of debt ridden nations to reduce the deficits they quite clearly see themselves in. As of GMT 1100, the GBP was trading at USD 1.42760 and EUR 1.16870.

US Dollar – US Markets

The Dollar’s position as the world’s safe haven currency has been further justified as more reports surface that central banks are moving away from the Euro to the Dollar. Furthermore, the world’s largest bank for deposits, Japan’s Post Bank, is expected to release figures at the end of the month, revealing that it has once again increased Dollar bond holdings. This falls among speculation that first quarter figures are likely to reveal that US foreign exchange reserves are likely to increase once again beyond the 2009 Q4 figure of 62.1%. Likely causes for this mainly surround the slump in the Euro and improved prospects for US growth. As of GMT 1100 the USD / EUR rate was 0.81870.

Euro – European Markets

Spanish stocks took a battering yesterday after the Bank of Spain continued to restructure the mutually owned banks within the country. CajaSur, one of the country’s oldest savings banks was the latest institution to be acquired. The news has brought the Euro under attack once again as yesterday’s events saw the single currency drop 1.4% against the Dollar and 1.3% against the Pound. This news has done little to ease fears of a ‘double-dip’ recession. However, something that may get the juices in the brain flowing is speculation that the Euro could replace the Dollar and the Yen as the funding currency of choice among carry traders. Rising asset prices and a stable/falling funding currency could prove to be the perfect mixture...

Other Currencies – Highlights

Europe’s debt crisis has paved the way for Brazilian currency traders, who are currently paying the highest premium in developing markets. This protection strategy has given investors the right to sell the Reais.