30 March 2010

Pound up against Weaker Dollar

The pound rose against a broadly weaker dollar in this morning's currency trading, but investors are still focused on the political uncertainty which overshadows the run-up to the May general election.

Later today the final adjustment to fourth quarter GDP figures will be made, and some hope that it will rise once more. Starting with 0.1%, it was then revised to 0.3% - will it reach any higher?

Meanwhile in the City, the FSA is carrying out a massive crack down on insider trading, the activity which has been illegal since 1980.

26 March 2010

EU leaders Agree on Greece Plan

The IMF has joined EU leaders for a large aid package for Greece, the total of which has now reached €22 billion.

Initially, the leaders of various EU countries were not keen on rushing to the aid of Greece, which is struggling under the weight of its massive deficit.

Germany for one was less than impressed with the idea of paying up in order to rescue Greece's economy. After all, argued Chancellor Merkel, surely we should all be trying to rescue our own economies before handing out cheques to the others?

Other leaders were more supportive including France. Nikolas Sarkozy and others argued that by helping Greece, the entire Eurzone is rescued from the constant pressure on the euro.

Whoever has the better argument it seems that the IMF's agreement to step in was enough to rein everyone into the plan. The euro rose against the US dollar and the pound after the plan was announced, but will it last?

23 March 2010

Germany proposes Bank Levy

It's pay-back time in Germany. The government, run by Angela Merkel of the conservative CDU party and her coalition party the FDP (headed by foreign minister Guido Westerwelle) are set to introduce a levy on banks for the massive bailouts they received during the financial crisis.

The levy is set to dissuade banks from relying on the state to rescue them in future, if they reach critical moments like those of the end of 2008.

Germany is so far the only country which is proposing to carry out such an action. Other big economies like the US and UK have set up a tax on financial sector bonuses to prevent further risk-taking, espcially through speculative currency trading or shares dealing.

19 March 2010

European Shares up with Banks in the Lead

Today European shares rose in the morning thanks to an announcement from Lloyds Banking Group. They expect to make profits in 2010, meaning good news for all - consequently banks led the share rise.

Lloyds is still 41% owned by the Government, after they were forced to bail out the ailing banking giant last year. This was due to the financial crisis and the difficult takeover of Scottish bank HBOS.

Now it looks as though things are taking a turn for the better. However, there is always one spanner in the works and today it was thanks to a BoE official who warned that there is still the risk of a double-dip. In other words, that the recovery of the economy could take a sharp knock downwards.

The comments sent the pound down on the currency exchange market.

09 March 2010

The Pound Extends Losses while Greece Calls for Fairer Treatment

The saga continues. Now Greece is lashing out at the USA for the apparently careless way in which traders and speculators are treating the euro. Greece's prime minister Mr Papandreou accused speculators of acting with greed, betting against the euro single currency and on default for Greece. He called for US officials to reign in such behaviour and to tighten up the way in which the financial market is regulated.

To be fair, he isn't alone. France's President Sarkozy also called for an end to speculators taking the situation 'too far'. He stated allegiance with Greece and said that if they need support, they will get it.

So, are foreign exchange traders being too callous with the fortune of Greece (and the other nations in the 'PIGS' group (Portugal, Italy, Greece and Spain)?

Meanwhile, the pound has extended losses this morning as weak housing data was released, as well as ratings agency commenting that Britain's credit profile had "deteriorated".

04 March 2010

Euro Rises on Greek Plans

Euro selling eased slightly in the foreign exchange market late last night - hooray! Thanks to a new plan to reduce deficit announced by Greece, investors were able to re-introduce a small amount of risk appetite.

As protesters and demonstrators took to the streets in Athens to battle the austerity plans (including a rise of VAT from 19% to 21%), international investors became ever so slightly more relaxed in relation to the euro.

The euro wasn't able to gain against the pound, due to the latter's advances following positive UK data.

03 March 2010

Pound Rises on Good Data

The pound rose today against the euro and the US dollar after better-than-expected UK economic data.

For one, consumer confidence is apparently at its highest level in two years - what happened to those awful January retail sales figures? - and the services sector reported a good improvement February.

What with GDP growth for the final quarter of 2009 being raised to 0.3%, anyone would think that the country is in a pretty good state. Indeed, it was the fact that the recession was over that apparently made consumers head out and shop with less caution. Not only that but consumers are also very confident about the next six months - the most confident than they have been since 2004!

But this week alone, the pound was receiving a fair knock in the currency exchange market, as investors shied away from the uncertain political future of Britain. The short term outlook for the pound remains shaky though any better-than-expected data has sent some investors head back for the currency.

02 March 2010

01 March 2010

Copper reaches $7,600 a tonne

Copper prices surged at the weekend in the aftermath of the huge earthquake in Chile. Commodity futures raders on the London Mercantile Exchange (LME) panicked when the 8.8 scale quake hit, worrying about copper supplies - Chile is the world's largest producer of the precious commodity.

For indeed, while a natural disaster often has tragic and traumatic effects - hundreds dead and more missing, many areas in ruins - it also has a direct effect on financial markets.

Copper is expected to reach $8,000 a tonne in the short term - on the weekend it reached $7,600.