Forex Daily

The financial markets have been up and down which is to be expected with Thanksgiving tradition. Currency markets went all out on Friday and the EURUSD saw a rise of over 100 points in a time period of less than two hours.

The rise came close to the key range of 1.50 but then quickly dropped again to 1.4800.

The approval rate for mortgages in the UK is dropping. UK Banks are certainly tightening up with a 37% drop on the amount of mortgages taken out in October 2006.

Re mortgaging approvals have also slowed and rumours are that further slowdowns will occur in lending and other financial transactions for 2008.

There looks to be more interest in the Bank Northern Rock. The Virgin group have already expressed an interest and on Tuesday JC Flowers buyout firm made a bid, this was followed swiftly by a another bid from a US equity firm Cerberus.

According to Josef Ackermann CEO at Deutsche Bank nerves are on the up in the financial markets down once again to the fears and uncertainty over the US sub primes.

Some markets he said had gone back to normal, whilst others remained in a panic state. He emphasised the need for greater clarity in banks and financial institutions disclosing losses and market prices. Financial confidence will return and it is expected that the economy will be much stronger.

Today saw the treasury prices were lower, investors were seeking bargains on the stock market probably trying to pick up on the recent economy worries.
Good earnings have been seen from Wal-Mart stores.

There is still a lot of controversy about bank charges in the UK. It is thought that many people may move banks if annual or indeed monthly charges are enforced to use their services.

The banks feel that charges maybe necessary if they are not able to charge high fees for overdrafts.

Free Banking

This means that the long established (1980) “free banking” may well go out of the window. People who constantly stay in the black do not usually incur any fees and the banks are able to subsidise this by charging those people that go over their overdraft limit.

The boss of the world’s biggest bank (Citigroup) has now left yet the chancellor Alistair Darling is saying that the UK Economy is strong enough to go through a period of financial uncertainty.

Banks are of course currently exposed to bad debts, something to keep in mind is that UK banks have seen high profits this year and sop balance sheets are strong.

Banks are likely to be more cautious about lending after the recent global credit scare.