Alistair Darling Set To Consider Credit Guarantees To Spur UK Lending

Daily Forex Fundamentals | Written by Finotec Group | Dec 10 08 09:58 GMT |

U.K. Chancellor of the Exchequer Alistair Darling is considering credit guarantees for households and companies to spur bank lending, a person familiar with the plan said. Darling is looking at a range of options to revive credit including whether to expand a 250 billion pound ($370 billion) Treasury program to support bank debt so that it covers mortgages and other loans, according to the person. 'It's critically important that we get the bank's lending again,' Darling told journalists in London yesterday. 'Price is important, but so too is the availability of credit.' The GBP/USD is currently trading at 1.4840 as of 8:35am, GMT. The yen fell against the euro and the dollar on speculation the U.S government efforts to cushion a global economic slump will encourage Japanese investors to seek out overseas assets with higher yields. The yen also declined versus the Australian and New Zealand dollars after Congressional Democrats and U.S. President George W. Bush's administration agreed on the outlines of a $15 billion plan to give General Motors Corp. and Chrysler LLC federal loans. 'The yen is weakening on sentiment for equities,' said Sean Callow, senior currency strategist in Sydney at Westpac Banking Corp., Australia's second-largest bank. 'It's clear the equity market wanted this bailout deal to be done, and currencies are following that.' The USD/JPY is currently trading at 92.60 as of 8:43am, GMT. The Sterling fell against the dollar and hovered near recent record lows against the euro on Tuesday as weak UK retail sales and house price surveys exacerbated worries about the dire situation facing the UK economy. 'Currencies are being driven by equity markets and people's attitude to risk. When equities underperform, sterling tends to underperform,' Barclays Capital chief sterling strategist Paul Robinson said. A survey by the British Retail Consortium presented a grim picture of the all-important Christmas shopping season as like-for-like sales fell 2.6 percent year-on-year in November, their sharpest fall in over three years. The GBP/USD is currently trading $1.4795 as of 9:00am, GMT. Economic Calendar Time (GMT) E Event Currency Period Previous Previous Significance 15:35 Crude Oil Inventories USD ** 15:00 Wholesale Inventories m/m USD Oct -0.1% -0.1% ** 09:00 Industrial Production m/m EUR Oct -2.1% ** 07:45 Industrial Production m/m EUR Oct -0.5% -0.6% ** Finotec Group Inc. http://www.finotec.com/ Disclaimer: FINOTEC Tradings Market Commentaries are provided for informational purposes only. The information contained within these reports is gathered from reputable news sources and not intended as investment advice. FINOTEC Trading assumes no responsibility or liability from gains or losses incurred by the information herein.