Yo-Yo Day for Sterling

After Ex International Monetary Fund boss Dominique Strauss-Kahn yesterday quit his position following allegation of sexual assault, he has now been released on bail by a judge in New York. The scandal is likely to continue for the foreseeable future but hopefully, this will not mask the ongoing façade that surrounds the eurozone at current. Pound Sterling If you’re after oracle-like predictions for the Pound, unfortunately we’re still searching as well. However, certain research articles, based on recent trading patterns indicate that Sterling may extend a loss towards the lowest level since April 1st which makes now an excellent time for pound sellers. Yesterday really did sum up the state of current markets as the Pound fluctuated between gains and loosed against the euro and US dollar. Whilst gilts fell as equities rose after a report showed UK retails sales increased more than economists predicted we still feel that an interest rate rise is highly unlikely in the near future. This conglomeration of information resulted in a topsy-turvy afternoon for the Pound. Dollar The dollar continued to fall against most major currencies because after a seemingly continuous stream of weak date, US housing sales fell. This has increased speculation the Federal Reserve will maintain current stimulus measures and keep interest rates on hold hence a weaker dollar. Those to take advantage of the dollars weakness included the euro and commodity currencies such as the Canadian and New Zealand Dollar. The euro also gathered pace, touching its highest level against the dollar in over a week. Euro Germany has today released Producer Price Index figures which have once again shown just how resilient and bullish their economy is. The figures came 0.4 percent above expectation and whilst this has had little immediate effect on the markets it just goes to show who the power nation is in the now faltering eurozone. A good measure of resilience may in fact hinder on whether European Central Bank President Jean Claude Trichet decides to maintain current unlimited bank lending measures designed to support the economy. ECB policy makers are being urged to remove such measures as fewer banks are now relying on central bank liquidity. Other Currencies – Highlights The Australian and New Zealand dollar both headed for their firstly weekly gains this month as an improving economic outlook for the two nations increased demand for higher-yielding assets. With interest rates still soaring in the nations down under investors are being attracted to assets in the South Pacific. South Africa, with its elevated interest rates and commodity based currency appears to be a strong bet when it comes to investment. As one of the few currency houses in the UK to actively trade the Rand we felt it was about time to look into the possibility of spot and future trades. For those of you with a future Rand requirement now might be a good time to think forward trading…