Market Report

Sterling remained downbeat yesterday as the Pound fell against the Dollar on speculation that the squeeze on short term bank lending will reduce demand for high-yielding currencies.

The Pound also reached levels close to a 1.5 year low against the Euro ahead of the Bank of England's first GBP 10bn auction of emergency 3-month funds today.

Data out tomorrow may show that UK house price growth has slowed this month - conventionally seen as a precursor to an overall reduction in aggregate demand. UK GDP figures out today will provide further indication as to the condition of the British economy.

RL

Last week was another week of turmoil for for the UK, as the Governor of the Bank of England came under scrutiny from Gordon Brown.

We saw the GBP/EUR rate the lowest it has been for 15 months, whereas EUR/USD is the highest it has ever been. The two rates are so close at the moment that i think we may see them overlap at some point this year!

This week we have Consumer confidence, Dureable goods orders, New home sales and University of Michigan sentiment from the US. From the UK we have GDP and the Halifax survey on house prices.

Have a good week.

DE

Archived Market Reports