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Currency report May 10

By • May 10th, 2010 • Category: Currency

The Coracle Currency podcast for May 10, 2010 in association with Crossbar fx and sponsored by ShipServ

There is no audio to the currency report this week: normal service will resume next week, but in the meantime, please find below the currency report:

Last week’s opening and closing figures don’t really tell of the volatility which existed just a few days ago which saw markets rise and fall in record amounts within the space of a few hours, and exchange rates vary by percentages usually experienced over weeks rather than hours.

It was the “perfect storm” – the Eurozone had to head back to the table at the weekend after the initial Euro 110 bn package from the ECB and the IMF was unable to quell fears about the problems in Greece spreading to the remainder of the EU – notably Spain and Portugal.

This fear spread quickly across every market – equity, currency and commodity.

Since then calm has been restored.

EU policy makers have agreed a loan package worth almost $1 trillion and a program of Bond purchases as they spearhead a global drive to stop sovereign debt issues threatening to shatter confidence in the euro.

The US Dollar and gold were the safe havens last week.

Factory orders, house sales and unemployment data all came out positive, but no one was listening – it was all about getting out of anything connected to Europe and indeed Sterling.

The UK has its hung parliament – all the parties are now playing musical chairs – who sits best with who and who will be left standing? The timing of this negotiating is not being viewed positively; the decisions that need to be made about our debt issues are not being made. They are still agreeing who is going to be allowed to make them! The “cuts” decisions have yet to be made and a democratically elected government will have difficulty getting the austerity measures required smoothly past the public – just look at what happened in Greece. While the music still plays, Europe settles down to a world of 10 years of loan repayments to one another, and the UK leadership barters with one another about what shade of colour the cabinet should be.

The Bank of England have announced today to keep interest rates at 0.5% so all eyes now on their quarterly inflation report due on Wed.

Tuesday 4th May to Friday 7th May 2010
USD vs.
Tues opening Fri closing
1.3143 1.2715 Stronger $
USD/CHF 1.0896 1.1084 Stronger $
USD/JPY 94.62 91.67 Weaker $
Gold 1179.50 1197.95 Up 1.6 %
Oil 88.23 77.35 Down 12.3 %

GBP vs. Tues opening Fri closing Trend
1.5180 1.4734 Weaker £
GBP/EUR 1.1550 1.1587 Stronger £
GBP/CHF 1.6542 1.6324 Weaker £
GBP/JPY 143.68 135.05 Weaker £

Current Prime Interest Rates Last Change Next Meeting
US Federal Reserve (FED) 0.25% 16th Dec 08 23rd June 2010
European Central Bank (ECB) 1.00% 7th May 09 10th June 2010
Bank of England (BOE) 0.5% 5th March 09 10th June 2010


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