30 April 2009

Krone Sees Gains

> It's the safe haven currency du jour: the Norway krone. Up to recently, it was always the good old Swiss Franc which was relied on for its strength, as were the yen and the US dollar. Lately, they have all lost their safe status for those who want less risk. Now, it is the krone which is taking the spotlight.

Yesterday, the Norway
krone gained 0.8 per cent against the euro to 8.7075, and 1.7 per cent against the dollar, to 6.5642. It was the second consecutive day that it gained strength. The price of a barrel of oil also increased by 2 per cent. Oil is Norway's main export so it stands to reason there is a constant correlation between the krone and oil.


Some currency traders see the krone as the best of a bad lot, but others are seeing it as a good place to focus, given the country's high current account surplus and an economy forecast that is much less gloomy than other European countries have seen of late.

29 April 2009

Market Confidence on Increase

Cancel the stockpiling and relax - according to the World Health Organization, thinks aren't as bad as they thought. Apparently the swine flu virus can be contained after all, and there's much less reason to be afraid.

Currency markets are reflecting this in that the US dollar and the yen have weakened the second day in a row against the euro and 14 of the 16 most-traded currencies.

The Bank of Korea has also released figures showing that their current account surplus has increased since February. Asian stocks have gained and New Zealand exports are up too.

So perhaps market confidence is on the up after all?

28 April 2009

US Futures Affected by Pig Flu

Predictions that travel and hotel shares would be down have come true as shareholders continued to bet that these would take the first hit out of the pig flu, which is taking an increasing amount of victims in Mexico.

Corn and soy futures took their biggest one-day decline in the USA, and meat products are likely to take a hit too: pork products have been banned from Mexico to Russia and China, with Indonesia set to followPredictions that travel and hotel shares would be down have come true as shareholders continued to bet that these would take the first hit out of the pig flu, which is taking an increasing amount of victims in Mexico.

Corn and soy futures took their biggest one-day decline in the USA, and meat products are likely to take a hit too: pork products have been banned from Mexico to Russia and China, with Indonesia set to follow.


The Nikkei closed 1.7% on Monday's trading and the Hong Kong Hang Seng was down 1.4%. Over here, the FTSE 100 index was also down 1.4% in today's early trading.

23 April 2009

Pound Reacts to Budget

The UK Budget speech, which took place yesterday (Wednesday 22nd), brought with it much anticipation and was slammed by critics and opposition leaders.

According to many, the Chancellor's predictions for the UK economy - growth to reach 3.5% by 2011 - were far too positive and some even labelled it as "fantasy".

After the speech came the IMF announcements for the world economy, and their forecast for the UK was markedly different to Mr Darling's. According to them, the economy is in fact going to contract to a total of 4.1% in 2009 alone.

Alistair Darling's speech (and possibly also the IMF's) had an effect on the currency market, and added to weakening of the British pound. At 10:30 am New York time, the pound was trading at $1.4539 and 89.62p to the euro.

22 April 2009

Interest Rates up by 31 per cent on RBS cards

If you have any issues with your credit card features, you might want to start shopping around for a better deal....especially if your card is provided under the umbrella of the RBS Group.

Why? Because they have raised the interest rates on a series of credit card by a huge 31 per cent, to 16.9 per cent.

Consumer watchdogs (and card customers) have reacted with outrage - and who would blame them - but RBS Group are not the only providers who have made changes. Around 28 providers have changed aspects such as the balance transfer and interest free periods on their cards.

RBS Group have said that any customers who have issues should raise them with the bank directly, and that they would deal with them as best they can.

But the question remains: why, after a summit meeting with the Government but one year ago, where banks promised to take a more sensitive approach to customers, are they now making such changes?

To keep up with the competition is the official answer...

21 April 2009

Tesco Sees Increased Profits

The weakening British pound has had a negative effect on supermarket giant Tesco - import costs have meant an increase in prices and therefore a harder battle to keep prices down for the consumer.

But in an effort to balance the situation, and to protect margins, Tesco has in place hedging - this means currency movements and fluctuations are insured against.

A wise move, and one of many which has seen Tesco do well - pre-tax underlying profits of £3bn were announced today.

While the food and drink side of the business has had its best sales figures, the non-food products are being worked on in order to increase them. For example, the banking area is set to see a new current account in the next two years. This will join other products such as credit cards, loans and savings accounts.

01 April 2009

G20 Leaders Gather in London

Gordon Brown is a focus of the G20 summit, as it has been many of his decisions and leadership that have come under the negative spotlight in the crisis. But will his attempt to call for a global approach aid his battered image? Some doubt that he will be able to recover his reputation and be taken seriously as an economic leader.

Levels of security are tight and a £7.5m security plan in place. City workers have been ordered to dress down and avoid wearing suits, to avoid becoming targets from protesters and campaigners, who have been spreading slogans such as "Hang a Banker".

This is US President Barack Obama's first trip to Europe since taking office, and many across the world have pinned hopes on him that he can bring together leaders to reach a new global initiative. But he'll be in for a tough ride as the summit has already been fraught with issues amongst leaders. France has already threatened a walkout if tighter regulations are not agreed on.

So while the leaders meet behind closed doors, is it not the City workers- the admin in currency markets, the overseas mortgage broker, the secretary at the bank -
who bear the brunt? Are they really to blame for what has happened on a global scale?