By Alex Ellis

Yesterday the FTSE 100 dropped 3 percent as the news hit that the investment company Dubai World has asked its creditors for an extension to repay its debts, for those readers who don’t know Dubai World manages and oversees a vast number of business projects and businesses for the Dubai Government, currently this debt stand at £35 Billion and the requested extension is until 2010.

Dubai World is seen as a key element in the rapid expansion of Dubai’s Economy, and many analysts are speculating that this will cause many of the British banks to become exposed to the debt problems in Dubai. This has the potential to make Sterling a very risky currency indeed, risk is not a word to be taken lightly when buying currency. Therefore in order to manage your risk, contact a currency broker.

Meanwhile if you purchase Japanese Yen then now is as good a time as ever to buy the currency, currently the JPY is trading at levels of around 80:1 on the Dollar, this is the highest level for 14 years. This spike could be short lived as the Japanese government are trying to force the exchange rates down as they feel this is bad for their economy.

In general this has been a bad week for Sterling and forcasted levels still show high levels of uncertainty.