US ($) Currency Thread 2

poggs

Morning,

Is this mornings crash caused by dubai being 'broken' or is there something else at play?

inspector_monkfish

poggs wrote: »

Morning,

Is this mornings crash caused by dubai being 'broken' or is there something else at play?

yes partly that, and also rumours of a UK Bank over exposed to them....

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09:06 26Nov09 GBP/USD: Dubai Risk Helping Weigh, re: Alleged UK Bank Exposure

London,November 26.

Dubai"s request for a six-month "standstill" on major parts of its debt (WSJ) is being flagged as a factor in cable"s one-and-three-quarter cent slump from an early Europe high of 1.6700, re: speculation that a UK bank might have "very large" exposure to the emirate.

inspector_monkfish

1.6520 trading at mom

inspector_monkfish

09:55 26Nov09 - Sterling falls broadly on Dubai, UK economy concern

* Sterling falls broadly; euro at 1-mth high above 91 pence
* Pound loses more than 1 pct vs dlr, hits 6-wk low vs yen
* Analysts cite concerns on UK banks' exposure to Dubai
* UK economic concerns weigh after Wednesday's GDP data

LONDON, Nov 25 - Sterling fell on Thursday, with the euro hitting a one-month high against the UK currency, on worries about British banks' exposure to debt problems in Dubai and concern over UK economic health.

The pound also fell sharply against the dollar, which recovered some of the previous day's sharp losses, and dropped to a six-week low against a broadly firmer yen.

Traders and analysts said sterling was coming under pressure following Dubai's move on Wednesday to restructure its biggest corporate debtor, Dubai World, and delay repayment on some of the company's $59 billion of liabilities.

"There are concerns regarding the extent of the exposure of the UK banks to Dubai, hence sterling is coming under pressure," said Ian Stannard, currency strategist at BNP Paribas.

European bank shares fell more than 3 percent on Thursday on concern about their potential exposure to Dubai debt problems. [ID:nWLA9194]. The fall was led by HSBC <HSBA.L>, Standard Chartered <STAN.L>, Barclays <BARC.L>, Deutsche Bank <DBKGn.DE> and Royal Bank of Scotland <RBS.L>.

The euro <EURGBP=D4> broke above 91 pence for the first time in a month to hit a high of 91.29 pence. It was last at 91.21 pence, up 0.7 percent

Sterling fell more than one percent against the dollar <GBP=D4> to a low for the session of $1.6500, more than two cents off an earlier high of $1.6740. It was last at $1.6524.

It also hit a six-week low against a broadly firmer yen <GBPJPY=R> of 143.49 yen and was last 143.30.

Analysts said concern over the outlook for the UK economy also weighed on sterling.

Data on Wednesday showed the economy shrank by 0.3 percent in the third quarter, less than the initial estimate of a 0.4 percent contraction but still heightening concerns that any UK economic recovery will be slow

"The GDP data saw a modest upward revision, but that has not changed the bigger picture that the UK is lagging other countries such as the euro zone in terms of its recovery," said Geraldine Concagh, economist at AIB Group Treasury in Dublin.

Some traders said moves were exacerbated by thin trading due to the U.S. Thanksgiving holiday, while falls on equity markets encouraged selling of perceived riskier currencies, including sterling.

Sterling remains broadly under pressure on concerns about the economy and fiscal deterioration, as well as about the massive amount of stimulus injected by the central bank under its quantitative easing programme.

"From a fundamental long term point of view, we don't see any reason to turn sterling positive in a context where the BoE is lagging the ECB in scaling down (a much more aggressive) monetary stimulation," KBC analysts said in a note to clients.

inspector_monkfish

10:14 26Nov09 Cable: US custodial demand, talk of Dubai press conference

A US custodial name has been a buyer of [CABLE] and a very short-term base of 1.6500 in place. Eur/Gbp, too, has topped out at 0.9130 (1.0953)after tripping the latest batch of stops through 0.9120/25. We are hearing loose talk of a 11GMT [DUBAI] press conference, but no other details as yet. It has been a wild European session so far, but if Gbp can keep away from those intraday lows a period of consolidation could ensue as traders begin to think Thanksgiving and shut up shop.

sabretoothtigger

"There are concerns regarding the extent of the exposure of the UK banks to Dubai, hence sterling is coming under pressure," said Ian Stannard, currency strategist at BNP Paribas.

Which bank, barclays?

inspector_monkfish

07:21 27Nov09 GBP/USD: Weighed Down by Dubai-Fuelled Risk Aversion


London, November 27.

Cable has broken below 1.6377 (today"s Asian session base) en route to a fresh
24-day low of 1.6321 in early European trade, as the pound continues to suffer on the back of Dubai-fuelled risk aversion. The FTSE 100 fell by 3.18%
yesterday--its biggest one-day fall since March, with GBP 14bn was wiped from the value of British banks re: Dubai-related fears (The Times). There are big
concerns that Dubai may be forced to sell UK assets to raise funds to help pay
off its debts.

Dow futures are currently down 292 points, having been down 42 points 24
hours ago (US markets were closed for Thanksgiving Day yesterday). The Nikkei
closed down 3.22% at a four-month low of 9,081 today (at 06:00GMT).

1.6430 was the short covering-fuelled recovery rally high from 1.6377.
Yesterday"s low was 1.6466.

inspector_monkfish

now trading even lower at 1.6290

inspector_monkfish

back up to 1.6430 now

inspector_monkfish

1.6455 trading