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Wednesday, August 13, 2008

BetOnMarkets Afternoon Update

The FTSE is down around 1%, but the real loser today is UK PLC. The pound is crashing as various factors come to a head. Up until July, the US Dollar was the currency the world loved to hate, now it’s sterling’s turn to be punished. Today’s Bank Of England inflation report was more dovish than expected, opening the doors to possible interest rate cuts before the year is out. This coupled with a housing market that has fallen through the roof has pushed Sterling down 1.11% against the Euro, 1.3% against the Dollar and 1.84% against the Yen today alone.

Stocks are not immune from the general stampede out UK securities. The financial sector is once again under pressure and without the FTSE’s other major sector firing on all cylinders (oil), the index is showing weakness where it counts. It has recently been reported that global bank’s losses & writedowns from the credit crunch have exceeded the $500bn marker. To add to the gloom, New York University economist Nouriel Roubini has recently estimated that this figure could double before the crisis is over.