Financial Markets Review by Lloyds TSB

The dollar fell sharply against its G10 counterparts after the Fed announced that it will purchase $300bn worth of treasuries.

The dollar fell sharply against its G10 counterparts after the Fed announced that it will purchase $300bn worth of treasuries.

Sterling weakened nearly 2% against the euro after worse than expected UK data for public finances and unemployment. Positive UK/EU yield differentials failed to arrest the slide.

The rally in equities and bank shares also helped emerging market currencies in Asia and eastern Europe to recover. EU ministers agreed to double emergency credit lines to €50bn to support eastern Europe.

Precious metals prices and oil rose sharply as the dollar slumped. Crude oil prices traded above $50pb for the first time since January 7.

Full Report