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Posted March 9th, 2009 by Charles Purdy

Weekly US$ rates and comments – week commencing 9th March 2009

With little else in terms of other significant economic data due out, the main focus for last week was the rather predictable decision from the Bank of England on interest rates. The decision to cut by another 0.5% to set a new base rate of 0.5% did not have any immediate effect on the value of sterling as the news was so widely expected but the “promise” of quantitive easing is undermining sterling and limiting possible upside movement. This week we see the release of UK and European industrial data and UK and US trade data. Neither sets of data are expected to be good showing significant declines for the former and significant balance of payments deficits for the latter. No rays of sunshine on the horizon for the foreseeable future.

 

Last week the two premiers of the UK and the US met to discuss the situation in the global economy as well as flaunt the ‘special relationship’ shared between the two nations, the positions of sterling and the USD in the financial markets could not be more different. The US$ is seemingly impervious to usual market influences and defiantly maintains the safe-haven asset status which has kept the US$ unnaturally strong against all other major currencies despite consistently poor economic data.

 

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