Financial Markets Review by Lloyds TSB

The pound has recorded a split performance this week. It fell against the low yielding currencies (Japanese yen, US dollar, euro and Swiss franc) and rose against the commodity currencies (Canadian, Australian and New Zealand dollars) and the Swedish krona.

Dovish MPC minutes adds to pressure on UK yields

The pound has recorded a split performance this week. It fell against the low yielding currencies (Japanese yen, US dollar, euro and Swiss franc) and rose against the commodity currencies (Canadian, Australian and New Zealand dollars) and the Swedish krona.

The USD performed well in G-10 currency space as equities fell back, with the S&P500 unable to sustain a foothold above 1,100.

Equity market outflows and discussions by politicians and the central bank (regarding currency strength) left the South African rand as one of the weakest emerging market currencies.

Government bonds rallied this week as risk-taking scaled back on the approach to year-end. A dovish set of MPC minutes combined with a slowdown in US leading indicators drove yields lower throughout the week.

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