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Daily Market Outlook

Wed, Jan 21 2009, 00:08 GMT
by AceTrader Team

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Market Review -  20/01/2009 18:52 GMT

British pound falls to multi-year low of 1.3862 on U.K. bank fears


The British pound tumbled across the board and cable fell sharply from 1.4441 to a multi-year low of 1.3862 in New York on Tuesday on active cross-selling in sterling after the Royal Bank of Scotland announced the biggest losses in U.K. corporate history earlier this week.  
  
The single currency weakened versus the dollar from 1.3104 to 1.2855 on escalating concerns that more eurozone nations may face credit ratings downgrades, which overshadowed the release of better-than-expected German ZEW economic sentiment survey. German economic sentiment index improved to -31.0 in December from -45.2, and compared to expectations of -44.0.  
  
U.S. currency rose broadly against European currencies but slipped against the Japanese yen on general optimism that the U.S. economy will improve under the Obama Administration, however, the greenback briefly pared gains versus major currencies as stocks extended losses after President Barack Obama failed to provide new details on measures to address the economic crisis in his inauguration speech.  
  
Elsewhere, New Zealand dollar and Australian dollar both weakened against the buck from 0.5382 to 0.5184 and from 0.6685 to 0.6471 respectively. The Bank of Canada cut rates 50 basis points to a 50-year low of 1.00% as expected. The U.S. currency rallied against the Canadian dollar to 1.2699 before easing.  
  
Wednesday will see the release of Japan's leading indicators, German PPI, U.K. claimant count, ILO employment, PSNCR and U.S. NAHB housing market index. Investors also focusing on the Bank of England vote outcome.

Published on  Wed, Jan 21 2009, 00:35 GMT