Forex Daily

A recent survey of the state of US house prices has revealed a record downturn in house prices for Q3 (April – June) of this year. US house prices are estimated to be worth a staggering 15.4 percent less than the same time last year.

These figures are the latest indication that the US housing climate is still in trouble, and in a separate report; the government released data showing that the sale of new houses is still close to a 16 year low.

As the Global economic crisis shows no sign of slowing down, two of the UK’s biggest energy companies, Scottish and Southern Energy and E.ON announced that they will be raising their energy prices because of increased wholesale costs.

In a report issued by E.ON, it states that it will be raising its electricity prices by 16 percent and its gas prices by a whopping 26 percent. This was followed by a statement by Scottish and Southern Energy, that it would also be raising prices, gas by 29.2 percent and electricity by 19.2 percent.

Swiss bank UBS this week announced losses of 358 million Swiss francs (£173m) in the second quarter of this year, and now plans to reorganise the company by separating its investment banking sector from its wealth management arm.

UBS is the bank for some of the richest people in the world and investors have become increasingly frustrated with the banks performance this year. Earlier this year UBS announced a huge loss of 11.54bn Swiss francs for the first quarter of 2008.

The US dollar rose against the euro yesterday and was boosted to a five month high, as crude oil prices fell and investors steered away from the euro as concerns over the state of the economy continue.

With the economic slowdown affecting the European, Asian and Australian economies and all three central banks keeping interest rates the same, demand for the dollar has been higher, causing the euro to suffer its largest weekly fall since 1999.

UK bank Northern Rock, this week announced that it had made larger than expected losses due to mortgage borrowers not being able to repay loans. The bank which was nationalised by the government in February after financial problems, made a loss of £585.4 million during the first six months of 2008.

Most of the losses were put down to the sharp rise in borrowers struggling to repay mortgages and an increase of repossessions last year. It’s not all doom and gloom though, Northern Rock did manage to repay over £9bn from a loan given to them from the Bank of England. This reduces the total amount to be repaid to £17.5bn.

The US dollar steadied on Monday, after losing ground on gains made on Friday due to strong US job data. Oil price rises prompted investors to sell over the weekend in favour of higher-yield currencies, but levelled out on Monday as traders wait for Central Bank data this week.

Analysts expect that the euro and dollar will even out until the Federal Reserve’s interest rate verdict on Tuesday and the European Central Bank’s decision of Thursday. It is widely expected that both banks will keep interest rates unmoved.