Currency Update – Wednesday

The British institution if M & S have this morning issued a warning of difficult trading conditions ahead, which for some reason caught their Shareholders unaware & consequently the shareprice went southerly at the start of trading today . Given the mass media coverage over the past months concerning the state & outlook for the UK economy, it is a little surprising that some would assume M & S would be immune to this. This said I’m sure the public will continue to support them, as where else would we go to purchase our socks, under garments & ‘bit’s’ of food shopping?

In addition, two of the UK’s large construction companies, Taylor Wimpey & Balfour Beatty, have released trading updates & again the overriding theme is one of tough trading conditions. Wimpey’s announcement containing news of Job losses & a 33% fall in its order book.

Along with yesterdays PMI data on UK manufacturing pointing to a some what static outlook, with the possibility that production could start to tumble due with a fall in new orders, a cool down is consumer spending & increase in input prices. The private sector looks to experiencing a period sustained pressure, which  shows little sign of easing in the short to medium term.

Yesterday we saw GBPUSD trade just over $2. Having read some of the traders comment surrounding this peak, it has been speculated that it was a sight distortion, as a result of one off flows of investments into Barclays Bank from a Japanese Bank. Consequently it is now trading back down below 1.99. The recent dollar weakness has help contribute towards the continued rise in oil prices, today trading around $142 a barrel.

A fairly quite day on the data front, all eyes are on the Interest Rate decision from the ECB to give some further direction to the markets. Consensus here is for a 0.25% increase.