Good morning,

Well what a start to the week. With continuing uncertainty surrounding the worlds markets there was a big correction yesterday in carry trades as traders went for risk aversion.

The main currency to be hit was the Australian dollar as it lost over 10% against the Japanese Yen and around 5% against the US dollar. This was ahead of the Aussie interest rate decision where it was expected to lower rates by 0.5%. They in fact lowered rates by a full 1% showing how this turmoil is world spread.

The Euro also has come under increasing pressure as countries in the Euro zone had different ideas on how to combat the current situation. Germany announced yesterday that they would guarantee all banking deposits which are likely to be followed by most other members of the Euro zone.

Sterling fared well against the Euro trading above 1.29 for the first time in a while but Sterling once again lost ground against the dollar with cable down on the 1.73’s at one stage and also once again lost ground to the Japanese Yen.

This morning data-wise we have UK industrial output and manufacturing production due. In Germany we have their industrial orders numbers released at 11 o’clock UK time. This afternoon it is the turn of the US with red book figures due around 2 followed this evening by a speech by the Fed chairman and the minutes of the Feds last meeting.

Have a great day.

Call +44(0)207 220 8181 to find out how we could save you money or visit www.rationalfx.com