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Posted December 1st, 2010 by Charles Purdy

USD/GBP Rate & Comments for 1st December 2010

US$/GBP 1.5623

 

Sterling climbed against the euro yesterday as concerns over sovereign debt in the euro zone continued to hamper the single currency. As a result, sterling broke the €1.19/ £1 barrier for the first time in around 2 months. The risk aversion that saw investors pull out of the single currency and into sterling also saw sterling lose ground against the US dollar, with sterling dropping to $1.5480/£1 for a time before levelling out at the $1.5530/£1 mark. The sterling/ US dollar rate is a real indicator of investors’ feelings towards risk and with Commerzbank forecasting a return to $1.52/£1 today in the short term, it is a far cry from the giddy heights of $1.6290/£1 that we saw on Bonfire night – just a few weeks ago. This kind of volatility demonstrates why you should be in touch to discuss forward contracts to protect against this kind of movement. 

In the USA, the US dollar continued to attract demand from risk adverse investors yesterday. The currency has been the ‘safe haven’ for those investors looking to avoid losses, with most buying US government bonds – traditionally one of the safest (but consequentially lowest yielding) investments globally. US data was positive yesterday, with consumer confidence and purchasing data both beating expectations. Out today, there is a wide range of data being released so call in now for a live price.  

 

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