Sterling fell against the euro on Friday, as anticipation over a potential Irish bailout helped the single currency. Sterling also slipped against the US dollar after China increased the capital reserve requirements for Banks. This saw concerns over potential tightening of policy in the country that could impact the wider global economy. Worryingly for the pound, it closed the week below $1.60\/\u00a31 which could mark a move back towards the mid $1.50s. This comes despite last week\u2019s minutes from the Bank of England Monetary Policy Meeting that saw the possibility of further Quantitative Easing pushed back as inflation is expected to remain high. With a quiet day for data today, expect movement related to the Irish bailout so call in now to speak to one of the team and protect yourself.<\/p>\n
In the Euro zone, the big news over the weekend was that Ireland is now officially seeking financial aid from international lenders – both to prop up the banks, but also to help the country to secure cheaper borrowing on the international debt markets. In a statement on Sunday, Finance Minister Brian Lenihan said that the bailout would be less than \u20ac100bn with a senior government official quoting a figure of between \u20ac80-90bn. It is a quiet day for data releases, so call in now for a live exchange rate as the market is likely to be volatile following this weekend\u2019s announcement.<\/p>\n
In the USA, last week saw Federal Reserve Chairman Ben Bernanke hit back at critics of the Fed\u2019s latest round of Quantitative Easing, stating that the best thing for the global recovery was policy that stimulated the US economy and brought it back to full throttle. He denied that the latest round of bond purchases was a deliberate attempt to weaken the US dollar and encourage exports. Call in now for a live exchange rate to avoid losing out.<\/p>\n
Elsewhere, the news that China was looking to tighten up on policy dented the Australian dollar last week. Chinese demand for commodities has driven the Australian economy, so any moves to dampen Chinese growth will see the Aussie dollar weaken off.<\/p>\n