Market Summary 2nd October 2009
By David Lamb – Head of Treasury Services
Risk trends continue to determine price patterns in the currency markets with data releases having little impact. Therefore Nationwide House Prices, which came in better that expected on Friday, had little impact in helping buoy the embattled pound.
With the global economy showing continued signs of recovery, equity markets remain strong. However further signs of problems ahead particularly in the financial sector could see a correction after a six month bull run. With this in mind the US Dollar and Japanese Yen could strengthen on a fresh wave of risk aversion.
At this moment Sterling is the sick man of the global currency market with the growing public debt and turbulence in the financial sector particularly damaging. Added to this comments by the BOE Governor that sterling weakness is helping to rebalance the economy certainly has not helped.
Of the majors the Euro is looking quite strong and with an expectation that the ECB will be the first central bank to increase interest rates, then Euro strength could be recurring theme over the next few months.
For more information please contact David Lamb, Head of Treasury Services at No1 Currency on 0131 561 8416
