Equity markets closed out a strong week of gains last Friday, following the much anticipated rate cut, by the Federal Reserve. The real injection of confidence came from the Fed’s projected pathway forward, with three more rate cuts, scheduled for this year. Following the initial slump in the US Dollar following the rate cut, the USD has steadily recovered to close out the week trading EUR 1.1750, while the GBP slumped to 1.3460. The UK released the latest Public Sector Borrowings number for August and it was yet another huge blowout number. This Government is heading for an economic crises and it is being reflected in the UK Gilts.The recovery in the reserve impacted the commodity currencies, with the AUD slipping below 0.6600, while the NZD headed back to 0.5850. The resurgent US Dollar is hammering these currencies and this coming week, will be a search to interrupt this renaissance.
