Betfair Official Blog

Holidaying in Europe this summer? You will get fleeced

Daily View - 4th March...

The FTSE opened 80 lower yesterday, and then proceeded to trade in a choppy range between 5780 and 5840 before closing at 5820. Today sees the open about 20 higher at 5835 but to be honest there seems little pressure in either direction. In the absence of any particularly bad news overnight, small buyers are likely to drift into various stocks which may cause some upward influence. Commentators are beginning to worry about the effects of the weakening Dollar on the US export market which still accounts for a hefty proportion of UK and European business. With the US consumer battered on virtually every front (housing, employment, general sentiment etc) the rising cost of imported manufactured products is likely to start to bite.

With the Dollar coming in for such a pounding, the travails of the pound have been slightly hidden. Historically we look towards the Pound/Dollar cross rate for our impression of the strength or weakness of Sterling. Versus the Yen we are now back down at the lows below 205.00, and the Euro is quite comfortably maintaining its level above 0.7600. 204.50 and 203.50 should be some support but the trend remains very much to the downside (as I have repeatedly mentioned over the past few months) and anyone holidaying in Europe this summer will be made painfully aware that prices (in sterling terms), are 15%, yes 15%, higher this year than last. This puts our current 4% RPI in perspective.

Oil went walkabout yesterday with the price for Brent shooting up to 102.30 before slumping back to under $100 and is now at 100.40-100.45. The price action looked very much like a bear squeeze taking out weak sellers and may be the signal for a bit of a sell off.