Currency Market Updates | Bail me out…

Bail me out…

Bail me out…

All eyes will be on the FOMC meeting today at 7.15pm this evening GMT. With the rate already at 0-0.25% the focus will not be on whether they will or won’t cut (no change is expected) but the wording of any statement releases. It is likely that the focus will shift to the quantitive easing measures that the Fed could use to stimulate the economy. Particular reference is likely to be made to the three key tools Mr Bernanke outlined in his speech in London on 13 January: credit easing, lending for financial institutions and buying of longer term assets.

It is thought that the Federal Deposit Insurance Corp. (FDIC) may manage a so-called “bad bank” that the Obama administration is likely to set up in an effort to help ailing US banks. The aim is to buy up poor assets on banks’ balance sheets. Plans are expected to be announced early next week. This will, no doubt, place pressure on the UK to come out with a similar package.

Yesterday saw Lord Mandelson announce a £2.3bn support package for the UK’s ailing car industry. This financial support will be given on a case by case basis to support training schemes for employees, help out car part suppliers and give grants for ultra low carbon car research and development.

The bailout plans that are being announced will create more reasons for free-market economists to voice their concerns and begs the question coined on the front page of a city paper this morning: “First Banks, Now Cars, What next?”

France’s Consumer Confidence Indicator was released this morning coming out ahead of expectations at -41 (versus -45 expected). This small bounce from the low of -47 seen last July is not significant but a move in the right direction.

On the currency front we have seen GBP continue to rally over the week to current levels of 1.4315. This is a small step up considering the 32% drop we saw from mid last year when GBP was trading at $2 to last week’s low of 1.35.

This short term sterling strength has seen GBPEUR remain above 1.07.

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Currencies Direct & Forex trading

Currencies Direct &

Forex trading

Edward Kirwan, BSc Hons, is an independent professional Investment Portfolio

Consultant working with Currencies

Direct and is based in Spain. Working with overseas property investments,

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overseas are all an important elements of this business.

Contact Edward Kirwan by e-mail: enquiries@invest-in-overseas-proper

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