Worldwide discussions on banking regulations

Banking regulations are in the headlines today as there is expected to be an indication from the EU later that new restrictions need to be imposed on banks. This comes as Italy acts to bring in wide-ranging budget cuts in an attempt to steer up confidence in the Euro.

Euro – European Markets

The Euro has continued its fall against the Dollar and the Yen on continued concern over the Eurozone debt crisis. Italy are the next Eurozone nation to be bringing in budget cuts in a bid to prove to investors that the single currency can be protected. The Italian Cabinet have approved 24 billion Euros of cuts, aiming to bring Italy’s deficit within the EU limit of 3 percent of GDP by 2012. The OECD’s chief economist has forecast that a double-dip recession is unlikely in Europe, as a weakening Euro should help exports. A report due today is expected to show a drop in French consumer spending.

Pound Sterling - UK markets

The Pound dropped against the Euro overnight but has picked up again so far this morning. For the first time since the last quarter of 2008, agents have reported a residential rent rise. It has been suggested that landlords are benefiting from increased house sales; this means that the supply of residential lets has decreased, helping landlords increase rental prices and giving a boost to this area of UK economic growth.

US Dollar – US Markets

The US Dollar has risen against most of its major counterparts although it has slumped against the Pound so far this morning. This is pending a large release of data today including durable goods orders, new homes sales, mortgage applications and approvals which are expected to show advances giving indication of recovery.

Other Currencies – Highlights

Discussions are taking place around the world about banking regulations. The Chairman of the US Federal Reserve has stated that banks must be kept independent of political meddling. However, the EU market commissioner is expected to announce later today that European nations should introduce an upfront levy on banks with proceeds going to a fund to provide financial aid for struggling nations. The Australian, New Zealand and Canadian Dollar have dropped as equity and commodity prices have slumped in reaction to the Euro crisis and tension in Korea. A weak Mexican Peso is putting it in strong competition with China for exports to the US.