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Posted May 25th, 2012 by Charles Purdy

USD/GBP Rate & Comments for 25th May 2012

US$/GBP 1.5659

A busy week for the UK saw sterling strengthen against the euro; but, weaken against the US dollar as risk aversion drove the market. Revised GDP data confirmed that the UK is officially in a “double-dip” recession with the latest figure showing a contraction of -0.3%. Retail sales figures were also much worse than expected revealing a -2.3% drop when only a -0.8% figure was expected. The International Monetary Fund (IMF) stated that the UK needs to consider injecting more money into the economy and potentially cutting interest rates to stimulate growth; however, despite this, the Bank of England’s policy meeting minutes revealed that the MPC members voted 8-1 to keep quantitative easing unchanged. All in all, a very negative picture of the state of the UK economy; so call in now to speak to one of our traders for the latest news and a live quote.

The US dollar performed well this week driven by its “safe haven” status in a risk adverse market. On the data front, US jobless claims came in as expected, durable goods orders figures missed market estimates and new and existing home sales figures both beat markets expectations. The US dollar tends to rally in times of crises as investors flee from riskier assets; we will have to see how long this trend continues; so, call in now for a live quote and the latest news.

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