The British pound is coming under pressure again on the currency markets as investors dump the pound in favour of currencies like the Euro and the US Dollar!

Sterling has dropped to the following rates:

One UK Pound will get you just $1.37 in the USA – this is great for the travelling American so they can come to visit our shops like we did when the rate hit over $2 to the Pound!

One UK Pound will get you €1.06 – which is not quite as low as it has been, but it is still very low and will likely give you a par exchange at the airports when you are travelling abroad.

One UK Pound will translate to Australian $2.10 – for those of you that are travelling further afield!

One UK pound gets Japnese Yen 121.77 – Which is not good for Japan exporting cars to the UK and this will put pressure on these car manfacturers!

From a business perspective this is good for companies that export to other countries and especially to the US and Europe, because our goods become so much cheap cheaper (up to 35% cheaper in the USA from the Sterling high last year) to those countries where we export.

However, where companies are heavily dependent upon imports, then where these come from within the Eurozone and from the USA, their costs will have risen sharply and of course could force them to either put up their prices or could force them out of business all together! Where prices are forced up, this could put pressure on inflation within the UK, which is the last thing we need right now!

Congratulations and good luck to Barack Obama – a very nervous start to his presidency!

There are millions watching in inaugural speech and watching him swear his allegiance to the United States of America and to God and he messed up his words, as he was clearly very nervous. I found this to be quite endearing and shows that he is human. However, let’s hope that these errors in his first works leading up to his presidency are not a sign on things to come. The USA and the World cannot afford to have another president like George W Bush!

AS I have written before, Mr Obama will have to hit the ground running – with the financial crisis, middle east problems in Israel, Iraq and of course Afghanistan, not to mention global warming.

I feel that Barack Obama restored himself in what sounded like a great inaugural speech including words like “re-making America” and I hold my hand up to him and wish him all the success – the World needs it…he holds the whole World in his hands – the next 100 hours will be crucial…the next few days need to be decisive…the following few weeks will be revealing…the coming months will show him out for what he brings to the most powerful country in the World…the next few years will be painted in history and lets hope that the real job at hand for Mr Obama is not too much and that he proves himself not just as the first black president, but more importantly in his capacity as a President of the United States of America!

His colour should not be looked at, but instead his actions, his decision and of course where he takes his country, the USA, from this moment on!

A week of record lows for interest rates from one side of the world to the next as the Bank of England cut rates to the lowest in 315 years to 1.5%, in the same week that South Korea reduces its rate to a record low of 2.5%.

Some good news on the high street

JD Sports has bucked the trend over Christmas with their sales up by 2.8% and that it expected its full-year profits to be ahead of forecasts. JD Sports has outperformed the FTSE all-share general retailer’s index by 1% over the last year and in September 2008 the company reported – so it is good to see a company on the high street performing well.

The other companies that fared better included supermarkets like Waitrose where sales were up 41% in the week to 27 December. Sainsbury’s also reported a rise in sales of 4.5% (excluding petrol) from last year for the 13 weeks to 3 January and John Lewis’s sales rose by 27.4% in the week to 3 January – so maybe the interest rate cuts are having a positive effect on consumer spending.

UK manufacturing at a low point

The UK’s manufacturing output has fallen to its lowest level for 27 years which shows just how difficult things are right now for the UK economy. The output has fallen by 7.4% year-on-year which is the biggest fall since June 1981. This was reported in the same week as Nissan announces the loss of 1,200 jobs in Sunderland due to the slow down – Nissan’s Sunderland factory was once hailed as the future of British manufacturing.

Record job losses in the US

Job losses within one year in the USA were the worst they have been since the time of World War II with employers axing a staggering 2.6 million posts in 2008, with over half a million of those in December 2008! This level of losses in US jobs puts the percentage of unemployment up to 7.2%! A similar situation is growing in Spain with unemployment hitting a 12-year high in 2008 of 3 million with one million of those unemployed being added to the jobless list in 2008 alone!

A bizarre twist on the car sales front

Car Manufacturer BMW has seen the sale of its Mini brand rise by 4.3% in 2008, whilst the sale of BMW cars has fallen by 4.3%. However, what is strange in an economic slowdown is that sales of Rolls Royce’s is up, with sales of the Rolls Royce Marque increasing to 1,212 in 2008 (2007 1,010).

End of the week saw:
Stock exchanges:
FTSE 100: 4,449
DOW: 8,599
S&P: 890.35
Nikkei: 8,837

Currencies
UK Sterling £ to US Dollar $ 1.52339
UK Sterling £ to Euro € 1.13428
UK Sterling £ to Japanese Yen 137.425
UK Sterling £ to Aus $ 2.15682
US Dollar $ to Euro € 0.744575
US Dollar $ to Japanese Yen 90.2100

Commodities
Nymex Crude oil – $40.39
Gold – $854.50

New homes in the US changed hands at their lowest price in four years during September, official figures showed.

The median price of a new single-family home was $218,400 (£141,870) according to the US Commerce department.

Sales were up 2.7% on the previous month, beating economists’ predictions, although total sales for the month were 33% below last year’s figures.

The boost follows news of the biggest monthly gain in five years for existing US homes sales in September.

Foreclosures

The median price of a new home in September was 9% less than it would have cost last year – and at its lowest level since September 2004 – when house prices were rising rapidly during a five-year housing boom.

The unexpected rise in new home sales followed a 12.6% drop in month-on-month sales in August, after a 3.6% rise in July.

September’s sales were actually down 21.4% in the north-east of the US, and 5.8% in the Midwest.

But the overall rise was fuelled by a 22.7% rise in sales in the west and a 0.7% rise in the south.

Meanwhile, the number of unsold new homes, which stood at 394,000 at the end of September, remains near historic highs, bolstered by a large number of US home foreclosures adding more properties to the market.

News reported by The BBC

Executives at Fannie Mae and Freddie Mac, the American financial giants which sit at the core of the country’s mortgage market, were desperately fighting yesterday to preserve their independence as a federal government takeover appeared closer than ever.

Shares in the companies collapsed to lows not seen for two decades amid fears that any government-led refinancing would wipe out shareholders. Freddie Mac bosses met US Treasury officials to complain that the uncertainty was crippling their ability to find a private market solution to their problems.

The companies own or guarantee almost half of all outstanding US mortgages and have become even more important props to the mortgage market since the appetite for exotic mortgage derivatives waned last year.

Last month, the Treasury Secretary, Hank Paulson, promised to do whatever it took to shore up the companies. Their failure could plunge the US housing market into a depression, and, because Fannie and Freddie debt is so widely held by foreign governments, it could also lead to a flight of capital from the US.

Mr Paulson has insisted that the promise to backstop the companies with emergency lending or the injection of equity capital ought to shore up confidence enough to ensure that the money is never needed. However, the companies’ shares have been in freefall since reports on the weekend that the Treasury was drawing up a nationalisation plan, which it could put into effect within weeks.

On Tuesday, Freddie Mac had to pay its highest-ever interest rate relative to Treasuries, to obtain $3bn (£1.6bn) of short-term debt.

Yesterday, Fannie Mae shares lost 27 per cent of their remaining value. Freddie Mac shares shed 22 per cent.

Freddie Mac has promised to raise $5.5bn of new capital to strengthen its balance sheet, battered by billions of dollars of losses on US mortgage investments and by the falling value of its ultimate collateral, namely American houses.

In private, executives have expressed their fury that uncertainty over the Treasury’s intentions has persisted, making it impossible to reassure potential investors they won’t quickly be wiped out in a subsequent government takeover.

Fannie Mae’s chief executive, Daniel Mudd, insisted yesterday that the company had more capital than ever before and did not foresee a government takeover. “They haven’t offered anything and we haven’t asked for anything.I don’t anticipate that they will do that.”

The Treasury has consistently said it has no plans to take action and said the meeting with Freddie Mac executives was routine.

News reported by The Independent