Financial Markets Review

Sterling fell 3.3% against the dollar, but rose 1.3% against the euro. The FTSE-100 lost 6.8% on renewed fears about the banking sector.

 

 

Euro zone interest rates cut to a 3-year low of 2%

 

Sterling fell 3.3% against the dollar, but rose 1.3% against the euro. The FTSE-100 lost 6.8% on renewed fears about the banking sector.

 

Gilts underperformed on expectations of further government measures to support bank lending, while intra-euro bond spreads continued to widen.

 

The ECB decision to cut interest rates to 2% was expected, and president Trichet hinted that rates would now probably not fall again until March.

 

Weak economic data and fall in confidence led to declines in emerging market currencies, and in the A$ and NZ$. Oil and gold prices fell. The Russian rouble has last more than 10% since January 1st.
 

 

Full Report

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