Markets calmed by Dubai liquidity announcement

Sterling has reached a one-month low against the euro but strengthened against the dollar on the foreign money exchanges today (November 30th).

The pound dropped to just over €1.095 during morning trading, with many investors nervous over news of Dubai's debt problems.

However, news that the United Arab Emirates' central bank will move to provide new liquidity appears to have allayed some of these fears.

Sterling traded slightly down against the dollar and stood at $1.647 by mid-afternoon.

Strengthening risk appetite among investors generally provides a boost to the value of the pound.

This then has knock-on effects on the spending power of those who send sterling-denominated international money transfers.

Commenting on the Dubai situation, Joshua Raymond, market strategist at City Index, said: "Nothing has significantly changed over the weekend and the problems are not going to go away until some transparency can be gained as to the larger implications of the delay in debt payments by Dubai World.

"We have some major economic data to come this week and if we get some really positive jobless figures out on Friday, the whole Dubai situation may be put to one side quickly."

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Posted by Alison Stephenson