Financial Markets Review by Lloyds TSB

Currency movements in the past month are suggesting doubt about whether the global economy is on a smooth glide path to recovery, the view that many participants had seemed to hold.

Summary of main changes to exchange & interest rate forecasts

Currency movements in the past month are suggesting doubt about whether the global economy is on a smooth glide path to recovery, the view that many participants had seemed to hold. Although currency volatility is still much less than at the start of the year, it has risen recently. The reason: monthly economic data are suggesting that the growth momentum has eased and could even reverse in some countries. This is our underlying view; economic conditions have improved appreciably but are still not yet consistent with anything like a broad-based or sustainable economic recovery.

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