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Posted January 19th, 2009 by Charles Purdy

Weekly US$ rates and comments – week commencing 19th January 2009

Following record week-on-week gains against the euro in the previous week, sterling had a steady week ending only marginally down against the euro on Friday. Persistently poor domestic data reduced sterling’s gains during last week. The growing UK trade deficit, weaker-than-expected retail sales and more high-street names going into administration will have limited sterling’s chances of strengthening against other major currencies.

 

 

The US$, currently at 1.466/£1, was initially buoyed by positive US trade balance figures last week but significant gains were pared back by poor US retail sales data and by Friday the US$ was heading back towards last weeks closing rates against sterling. There was also the announcement of yet another bail-out plan from the American government, this time to invest billions more tax-payer dollars into the Bank of America in exchange for preferred stock and protected loans. A good measure of the uncertainty within global markets at present is the resilience of the US$. Record low levels of inflation and persistent poor economic data have not apparently harmed the US$’s status as the world’s favourite reserve currency at times of crisis.

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