Call Free Phone Now:0808 163 0102
Outside the UK: +(44) 207 898 0541 Request a Call Back
  Daily Currency News Euro US Dollar Educational Articles  
Posted November 9th, 2009 by Charles Purdy

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

Sterling held its own last week as the week revolved around the meetings of the various central banks. In the UK the Bank of England kept interest rates on hold which was as expected. But the BoE did increase their programme of quantitative easing by £25bn to £200bn. From past experience this should have led to sterling weakening across the board. But two factors seemed to benefit sterling. The first one was the increase was less than some had forecast which the market took as a positive. The second factor was the BoE emphasised that the funds would be made available at a slower rate than those previously. This again was viewed as a positive. So has sterling turned the corner? That may be wishful thinking but at least the last two weeks have on balance been positive which is a start. This week we have the BoE’s inflation report which will give the data behind their decision on quantitative easing and will allow the market to try and look into the future.


The US$ sits at US$1.677/£1 inter bank. Last weeks meeting of the Federal Reserve highlighted for the 100th time that interest rates will be kept at the current low levels for quite a while. But at the same time they detailed the factors which necessitated such a course of action; spare production capacity, low inflation/deflation and low inflation expectations. All fairly obvious but good to see detailed. Unemployment figures released on Friday showed that US unemployment has doubled since December 2007 and is now over 10%. I think this highlights why US interest rates are going to be on hold for quite a while. On Friday we have the September trade balance figures released and some consumer confidence figures for November.


Be Sociable, Share!

Comments are closed.

© Copyright 2010 Smart Currency Exchange. All Rights Reserved.
Site by Iniquus