The value of sterling has dipped during trading this afternoon (May 28th), reversing gains that had been seen earlier in the day.

According to Reuters, the currency was valued at $1.4450 against the dollar on Forex trading platforms at 16:01 BST, putting it down 0.8 per cent for the day.

It had earlier come close to a two-week high versus its US counterpart as the risky asset tracked gains on the stock market, but dipped in the afternoon due to faltering demand.

The euro moved away from an 11-month low against the pound, by climbing 0.5 per cent, putting it at 85.05p.

Paul Mackel, currency strategy director for HSBC, was quoted by the news agency as saying the sterling-dollar relationship “is really tracking what equities are doing at the moment”.

“It’s a skittish market,” he added.

During afternoon stock trading in London, the FTSE 100 was down slightly, dipping 0.13 per cent to 5,188.43 points at 17:00 BST.

The link between the price of copper and the value of the dollar means the metal is set to record its first weekly gain for seven weeks.

Futures for delivery in July have risen in value by 2.9 per cent during CFD trading this week, despite a slight fall on the Comex division of the New York Mercantile Exchange today (May 28th), Bloomberg reports.

At 08:39 local time, the contract was down 0.85c – or 0.3 per cent – putting it on $3.15 per pound.

Analyst at Royal Bank of Scotland Daniel Major said in an interview with the news agency that “we’ve seen some stabilisation, but mostly because of currencies”.

The dollar index – which measures the greenback against a basket of its major counterparts – is on track for its fifth weekly climb in the past six weeks, but Mr Major warned falling copper demand from China real estate sector may hit prices.

“That would provide further price weakness as we approach summer,” he remarked.

The recent sharp falls in the price of platinum are likely to be over, one expert has forecast.

Since reaching a 21-month high last month, the precious metal has dropped in value by 11 per cent in CFD trading so far in May, Bloomberg reports.

But independent analyst Jim Stellakis was quoted by Bloomberg as saying the dip has probably finished and that prices will now either stabilise or begin advancing.

“Since 2001, platinum prices have shown a tendency to trade sideways or rise after they violate multi- month uptrends,” he observed.

At the close of trading yesterday the precious metal was priced at $1,562.50 (£1,071.14) an ounce, after rebounding 3.7 per cent following a 12 per cent drop across the week.

Gold, which investors often turn to in times of financial instability, has been boosted recently by the uncertainty over sovereign debt in the eurozone.

It reached a record high of $1,249.40 per ounce earlier in the month.

Futures on US stock indexes have risen during pre-market trading today (May 28th), despite an unexpected pause in consumer spending in the country last month.

Bloomberg reports the Standard and Poor’s 500 index is set to continue the rally seen on trading platforms yesterday, with futures up by under 0.1 per cent to 1,101.8 at 09:00 local time in New York.

Spending came to a halt in April as the public opted to use income to boost savings and Eric Green of Penn Capital Management was quoted by the news source as saying the consumer "is in pretty good shape".

"The job markets and housing markets are [also] improving," he remarked.

Apple is set to be one of the strongest performers when the markets open, boosted by strong demand for its iPad, which went on international sale today.

There have been shortages of the product inside the US since it was launched at the start of last month and the firm’s stock was up 1.5 per cent in early New York trading.

Easing concerns over the debt situation in Europe have helped shares to climb in Japan today (May 28th).

The Nikkei 225 ended the day 1.3 per cent higher on trading platforms, putting it on 9,762.98 points.

Exporters and commodities traders were again the strongest performers, with Mitsubishi Corp adding 1.4 per cent on the back of rising metals and oil prices.

Rival firm Mitsui and Co added 1.4 per cent – building on the 4.2 per cent surge seen yesterday – while Inpex, the largest energy explorer in the country, rose by the same figure.

Strategist for Sumitomo Trust and Banking was quoted by Bloomberg as saying stocks in Japan are currently "undervalued".

"The recent drops provide long-term investors with a good opportunity to buy companies that will benefit from growth in demand worldwide," he added.

The attractiveness of gold as a safe haven investment has put it on track to record its second consecutive monthly gain.

Bloomberg reports bullion for delivery immediately was priced at $1,212.90 (£836.34) per ounce during CFD trading 15:55 local time in Melbourne, putting it up 3.1 per cent for the week and 2.9 per cent on the month.

Investors have been drawn to the precious metal due to worries about sovereign debt in the eurozone and Alan Heap of Citigroup said in an interview it is “fulfilling its traditional role as a safe haven” at present.

Concern over the situation in Europe means a rally to $1,500 per ounce could take place this year, he added.

The commodity’s price reached record a record high of $1,249.40 per ounce earlier in the month – beating the previous figure set in December 2009 – and a survey by Bloomberg revealed experts believe its value us likely to continue climbing.

Of the 26 traders, analysts and investors questioned, 22 said they expect its value to move higher next week.

GBP broke out the 1.4520 zone at the end of the week due to what I would say is nothing more than patriotic buying of sterling. The new UK chancellor, George Osborne, announced his £6 billion worth of cuts and the potential for a rise of CGT for UK economy.  This won’t work!  We are in an economic environment where people are locked in to responsibilities, to say we will stop employing here and reduce recruitment there is pointless. These cut backs are a coalition facade. Sterling had its rally based on Osborne’s stern refusal to back an EU levy on the creation of a fund to pay for the winding down of failed banks. Sterling lovers see this as a resolute two fingers up to the Eurozone and they love nothing more than  a Euro bashing as a reason to buy sterling or rather they buy on the idea Britain is better off than the Euro. The fact is we are not.

The Euro stood its ground this week after hitting the 1.2154 level and bouncing.

The 1.2135 level is heavy support and anything around this is going to bring buying interest; this along with China and EU buying to bolster the Euro adds to the firming of the currency at this level. The DOW depreciation during mid week and Euro rally was pure month end repatriation of funds. This happens when Euro hedge funds have DOW equity components as they sell off their equity longs – which are dollar denominated – and then transfer them into Euros. This happens generally at the month before a quarter end as it gives the balance sheet a healthy outlook going into the end of the next quarter.

Merkel has been told to keep quiet this week after her naked short selling comments spread fear in the markets that more downside momentum was to be released in the eurozone. This halt in the Euro collapse is a mere blip on its downward progression. There is nothing healthy about the Euro and we have two feasible out comes; one the restructuring of the debt issuance system in Europe or, and I am an advocate of this, the slaughter of the PIGS and trimming of dead wood. The Euro has failed, let’s deal with it.

Gold had a slow appreciation this week from the 1180.0 level trading 1215.0 Friday. Gold more now than ever is being used as a hedge against any economic turmoil. Buy stocks, buy gold as a hedge, buy risk, buy gold as a hedge, buy gold, buy some more as a hedge.  1333.0 still upside in this yet.

About Author:

Andrew Johnston is Senior Institutional Trader with One Financial Markets; a former analyst with Goldman Sachs and more than ten years successful trading experience, Andrew is currently Head of One Financial Markets institutional desk.

Stocks have climbed during trading on Japanese markets today (May 27th) with shipping forms and trading companies leading the gains.

The Nikkei 225 ended the day up 1.2 per cent on 9,639.72 points, while those using trading platforms to invest on the broader Topix index saw it finish on 869.89 points – a rise of 1.3 per cent.

According to Bloomberg, there was a three per cent increase for Mitsui OSK Lines after a report indicated demand for container operations is set to improve.

And Mitsui and Co, one of the country’s largest trading firms, added 4.2 per cent on the back of jumps in commodity prices.

Chief strategist for Resona Bank Koichi Kurose was quoted by the news agency as saying some traders have an optimistic outlook.

“Since the real global economy is good, some investors see an end to European debt issues in the near future,” he remarked.

Gains have been seen across many indexes today, with the FTSE 100 and FTSEurofirst 300 both advancing in the afternoon session.

The value of crude oil has risen again during trading in New York today (May 27th) following yesterday’s four per cent gain.

Bloomberg reports the commodity climbed by as much as 1.2 per cent during CFD trading using the New York Mercantile Exchange putting it on $72.37 (£50.04) per barrel.

The recent rally has raised the appeal of commodities among investors, but one trader warned against over-optimism.

Commodity-derivative sales manager for Newedge Ken Hasegawa was quoted by the news source as saying “it’s possible for crude oil … to go down again below $70″, adding that while the US economy “is looking good”, there are still concerns about the debt situation in Europe.

He added prices are being held back by the current high inventories of crude oil and other products related to the commodity, the price of which reached record highs of around $140 per barrel in summer 2008.

The euro has dipped close to the four-year low reached last week following news China is evaluating its exposure to eurozone debt.

In early trading on online Forex markets today (May 27th), the currency was valued at around $1.2220 against its US counterpart, Reuters reports.

It dropped by 1.5 per cent yesterday and is now just above the $1.2143 (83.7p) it slipped to last week, a level not seen since 2006.

According to a report in the Financial Times, China is reviewing its position regarding eurozone bonds due to the climbing deficit in some countries.

Traders are already concerned the debts could have an impact on the global economic recovery and have been steering clear of riskier assets in order to protect their investments.

Despite the dip in the euro stock markets across Europe have opened broadly higher today, with the pan-European FTSEurofirst 300 adding 0.8 per cent, taking it to 979.79 points.

The price of gold has climbed on the commodity markets today (May 27th) as investors look to the precious metal as a safe haven from the current debt uncertainty in the eurozone.

Reuters reports the commodity was priced at $1,214.95 (£833.732) per ounce on trading platforms at 15:44 BST, up from the $1,209.90 per ounce price set in New York yesterday.

It has proved popular over recent weeks as traders seek to protect their wealth from the risks across Europe and head of commodity research for Deutsche Bank Michael Lewis said the rally in gold “looks quite solid”.

“We still feel market disruption risk is something we’re going to see quite frequently now over the next year,” the news agency quoted him as stating gold could benefit from a number of risks that are likely to worry traders.

Gold’s value reached a new high earlier this month, exceeding the previous record set in December 2009.

Expansion in Asia has prompted the Organisation for Economic Cooperation and Development (OECD) to raise its forecast for the growth of the global economy.

In a move that may be welcomed by those trading stocks through online brokers, the Paris-based body said it now expects increases within OECD countries to reach 2.7 per cent in 2010 and 2.8 per cent next year.

This is up from the predictions of 1.9 per cent and 2.5 per cent respectively that it made in November 2009.

The body said the US will record 3.2 per cent expansion both this year and next, while Japan will increase by three per cent and two per cent.

However, the eurozone will lag behind, expanding by 1.2 per cent and 1.8 per cent over the two years.

Angel Gurria, secretary-general of the OECD, said this is “a critical time for the world economy”, adding: “Coordinated international efforts prevented the recession from becoming more severe but we continue to face huge challenges.”

Currently 31 countries are members of the OECD, which was established in 1961.

Japan’s Nikkei 225 rose during trading today (May 26th), however gains were limited by ongoing worries regarding debt problems in the eurozone.

The index ended 0.7 per cent higher on online trading platforms, putting it on 9,522.66 points.

However, there was a 0.1 per cent fall for the broader Topix, which finished the day on 859 points.

According to Bloomberg, this was the first time the Nikkei had risen for six days, with gains from commodity-related stocks contributing to the increase.

Trading house Mitsui and co – which gets most of its profits from commodities – added 3.7 per cent, while merchant fleet operator Mitsui OSK Lines rose five per cent.

Equities manager for Nikko Cordial Securities Hiroichi Nishi was quoted by the news agency as saying there are “still concerns about Europe’s financial condition”, as the euro’s value is likely to continue falling.

“Company earnings are increasing. Stocks have been oversold,” he added.

Reports suggesting the US economy is improving have helped the price of copper rise for the third time in four sessions during trading today (May 26th).

According to Bloomberg, the metal for delivery in July was up 2.1 per cent to $3.1065 (£2.152) a pound at 10:38 local time during CFD trading using the Comex division of the New York Stock Exchange.

The climb came after data form the Commerce Department revealed new home purchases in the US reached their highest level in two years during April, while the metal’s value was also boosted by the Organisation for Economic Cooperation and Development’s (OECD’s) decision to raise its global economic forecasts.

However, strategist for Bank of America-Merrill Lynch Michael Widmer was quoted by the news agency as saying he is still “very cautious” with the outlook for metals.

“All these issues that people are concerned about – Europe, China – are still out there,” stated

The OECD noted it now expects member countries to see economic expansion of 2.7 per cent this year and 2.8 per cent in 2011.

The FTSE 100 closed above 5,000 points in trading today (May 26th) after being boosted by strong gains from mining firms.

Those trading on the London index using online brokers will have seen it finish two per cent higher on 5,038.08 points.

According to Reuters, mining companies gained on suggestions the Australian government could be set to relax tax rules, prompting Lonmin, Rio Tinto, Xstrata, Anglo American, Kazakhmys and BHP Billiton to add as much as 7.3 per cent.

Banks – which were among the biggest fallers earlier in the month when markets were hit by worries over the level of debt in the eurozone – also recovered, with Barclays, Standard Chartered, Lloyds Banking Group and Royal Bank of Scotland recording climbs of up to 6.7 per cent.

Burberry was one of the biggest individual gainers, jumping 7.6 per cent after revealing its profit for the year to March 31st was up 23 per cent to £215 million.