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Market Review - 09/03/2009 22:32 GMT
Sterling falls sharply as U.K. Government increases stake in Lloyds banking group and also on BOE Bean's bearish comments
The British pound declined to its lowest level since January 26 at 1.3741 on Monday due to active cross selling in sterling as concerns over the U.K. financial sector increased after a deal was announced in which the U.K. Government could obtain a stake of up to 77 percent of Lloyds Banking Group. Bearish comments fm BOE's Bean, who said that there was room to cut rates by the central bank, also put pressure on cable. Gbp/jpy fell to as low as 135.99 while eur/gbp rallied to 0.9188 before easing.
Dollar rose against the yen after Japan posted its first current account deficit in 13 years of 172.8 billion yen, compared to a median forecast of 15.3 billion yen and after December '08 saw a surplus of 125.4 billion yen. The greenback hit an intra-day high of 99.19 before easing to close at 98.84, while the single currency rose to 125.50 versus the yen before retreating to finish at 124.64 on profit taking.
Euro weakened to 1.2555 on the back of the selloff in sterling before bouncing to 1.2663, however, eur/usd moved lower again in New York trading after U.S. equity markets were unable to hold on to their early gains (Dow ended the day 79 points lower as worries remained over financial institutions despite Bank of America's announcement that it would be able to raise funds from the private sector). In addition, comments from European officials throughout the day (including Liikanen and Almunia) increased speculation that the ECB would cut rates soon in order to help the eurozone economy recover from its recession. The greenback rose slightly against the Swiss franc to 1.1587.
Economic data to be released on Tuesday include U.K. BRC retail sales, RICS house prices, industrial and manufacturing production, German consumer prices and trade data and U.S. wholesale inventories. Fed Chairman Bernanke is scheduled to speak at 12:30GMT...
Sterling falls sharply as U.K. Government increases stake in Lloyds banking group and also on BOE Bean's bearish comments
The British pound declined to its lowest level since January 26 at 1.3741 on Monday due to active cross selling in sterling as concerns over the U.K. financial sector increased after a deal was announced in which the U.K. Government could obtain a stake of up to 77 percent of Lloyds Banking Group. Bearish comments fm BOE's Bean, who said that there was room to cut rates by the central bank, also put pressure on cable. Gbp/jpy fell to as low as 135.99 while eur/gbp rallied to 0.9188 before easing.
Dollar rose against the yen after Japan posted its first current account deficit in 13 years of 172.8 billion yen, compared to a median forecast of 15.3 billion yen and after December '08 saw a surplus of 125.4 billion yen. The greenback hit an intra-day high of 99.19 before easing to close at 98.84, while the single currency rose to 125.50 versus the yen before retreating to finish at 124.64 on profit taking.
Euro weakened to 1.2555 on the back of the selloff in sterling before bouncing to 1.2663, however, eur/usd moved lower again in New York trading after U.S. equity markets were unable to hold on to their early gains (Dow ended the day 79 points lower as worries remained over financial institutions despite Bank of America's announcement that it would be able to raise funds from the private sector). In addition, comments from European officials throughout the day (including Liikanen and Almunia) increased speculation that the ECB would cut rates soon in order to help the eurozone economy recover from its recession. The greenback rose slightly against the Swiss franc to 1.1587.
Economic data to be released on Tuesday include U.K. BRC retail sales, RICS house prices, industrial and manufacturing production, German consumer prices and trade data and U.S. wholesale inventories. Fed Chairman Bernanke is scheduled to speak at 12:30GMT...
