Weekly US$ rates and comments – week commencing 26th May 2007
Sterling has been holding steady. The Bank of England’s minutes showed that the vote was 8 to 1 in favour of holding UK interest rates. Inflation is the BOE’s major concern. UK retail figures for April were better than expected which given declining house prices and slowing economic growth was a surprise. This probably means that any cuts in UK interest rates will happen towards the end of the summer. So the period of stability may hold for a while longer.
The US$ lost a bit of ground to sit at US$1.975/£1 interbank as fears over stagflation grow. This is when the economic growth rate is low or even possibly negative and much less than the rate of inflation. So the Fed now seems to be getting criticised for cutting US interest rates too quickly. Compare this to a month ago when the Fed was being lauded for its prompt and decisive action in cutting US interest rates. A thankless task being a central banker. So shorter term further weakness for the US$ is expected.
Topic: US Dollar Currency Exchange
Weekly US$ rates and comments – week commencing 19th May 2008
Steady week for sterling last week. This was even after the doom and gloom of the Bank of England’s economic forecast which showed increasing inflation and slower economic growth. The worst result possible. The effect of high inflation is that interest rate cuts become less likely. The market feels that we will see Continue Reading…
Topic: US Dollar Currency Exchange
Weekly US$ rates and comments – week commencing 12th May 2008
Not a good week for sterling last week. Sterling is having a tough time as UK consumer confidence appears to be at record lows and UK industrial output fell 0.5%. The Bank of England kept UK interest rates on hold which was as expected. The market feels that the BOE could well cut UK Continue Reading…
Topic: US Dollar Currency Exchange
US$ rates and comments – week commencing 5th May 2008
Sterling seems to be getting into a trend where it does well at the end of the week. I suppose its all relative as we are still a long way from where we were in the autumn of last year. UK manufacturing input and output prices rose to record levels in April. The feeling Continue Reading…
Topic: US Dollar Currency Exchange
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