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Posted July 26th, 2010 by Charles Purdy

USD/GBP Rate & Comments for 26th July 2010

USD/GBP – 1.547

Sterling jumped sharply on Friday after stronger than expected economic data saw demand surge for the pound. Sterling jumped by more than 1% against the euro and US dollar after the 1st estimate of 2nd Quarter GDP growth for the UK almost doubled analyst estimates. Most had been expecting a mild improvement of 0.6% – and even then many were skeptical after the last 2 first estimates came in woefully under par. However, when the data showed that the UK economy had grown by 1.1%, many investors started to bet that the Bank of England would start raising interest rates sooner than expected. On the other hand, with many economic headwinds to come, this could be the best growth we see for some time as the government slashes spending over the coming months. Elsewhere on Friday, data showed that mortgage approvals in the UK fell by 8% on the June before. There is not much on the horizon this week with the exception of a speech from Mervyn King on Wednesday. Get in touch now for a live exchange rate.

In the USA, following the stronger than expected UK GDP data, the US dollar weakened against the pound. Ahead this week there is US GDP data released on Friday, unemployment and consumer confidence data. On the horizon, a Bloomberg report has hinted at potential issues facing China as they face the repayment of a $1.1 trillion loan. The report hints that revenues are failing to appear in the country and as such they may face a shortfall of 23%. Watch this space to see how this develops. Get in touch now for a live exchange rate.

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