The pound has fallen to a new record low against the dollar today. Is this a sign of a lack of confidence from the UK business community in the Government’s latest measures to combat the recession? Or thanks, perhaps, to Barack Obama’s Inauguration Day? The first black U.S. president is ready to make history: from his landslide election victory he is riding a wave of public optimism that he will need to solve the worst economic crisis in 70 years.
The dollar grows and the sterling sinks… “Sterling tumbled to its lowest level against the dollar in seven-and-a-half years today,” reports the Guardian.co.uk “as traders digested the implications of the government’s latest multibillion-pound lifeline to support the banking sector”.
The British pound has been weakening during the economic downturn: in the past 12 months the sterling has fallen and shows no signs of stopping. The question is still: is it time to change and accept the euro?
Here is a quick press review selected from the most interesting business news of the day:
Pound Falls to 5 Year Low Against Dollar: the pound slid to the lowest level in more than five years against the dollar after the Bank of England Governor Mervyn King said Britain’s worst banking crisis since World War I is likely to push the economy into a recession – read more on bloomberg.com.
Factory gloom ‘worst since 1980’: the slowdown in the UK economy is now spreading to sectors previously resilient to weaknesses in the banking and housing markets. The crisis is spreading into all sectors of business, affecting unemployment and inflation – read more on BBCNews.co.uk.
Soaring art market returns to earth with a bump: the global financial crisis has finally caught up with the art world. Experts warn that things are likely to get tougher: what’s happened in the financial markets will also damage the art market because liquidity is tighter everywhere – read more on Reuters.co.uk.
European business backed up: during this crisis, resultant cuts in jobs, production and investment, means companies must hunker down hoping to survive what they fear will be a ferocious reversal – read more on Ft.com.
David Beckham will join AC Milan on loan in January: the English football player will move to Italy for few months at the beginnig of 2009, according to Adriano Galliani, the Italian club’s vice-president. Beckham wants to train and play with Milan, and Milan wants him: Beckham’s commercial value means full stadiums and read sponsors. Maybe not all rich men are crying – read more on Thetimesonline.co.ukthe English football player will move to Italy for few months at the beginning of 2009, according to Adriano Galliani, the Italian club’s vice-president. Beckham wants to train and play with Milan, a sentiment reciprocated by the Italians: Beckham’s commercial value means is nothing but good news for club merchandise and ticket sales – read more on Thetimesonline.co.uk
Last week the German Finance Ministry spoke about the long way to a recovery in Europe’s biggest economy, the euro rose to $1.5916, whilst the dollar and the pound slumped against the euro. Then, after the announcement by the Treasury Secretary Henry Paulson concerning the possibility of raising interest rates, the dollar has started to rise against the yen once more. In the meantime the pound has stabilised against the dollar, but analysts have warned the pound is to weaken by the fear of a UK recession.
It’s a volatile period in which markets are stormy and exchanges are swinging in every direction. The bull and bear of the market seem to have replaced the inconsistency in London weather as we seem to have found a sunny patch for a change.
A lot of experts suggest just one solution: spreadbets. “Spreadbetting is a way in which risks can be reduced and overall returns enhanced”, say senior sales traders. But what is a spreadbet?
Keep in touch and we will soon explain what it means and how it works.