GBP/USD Rates and Comments for 19th November 2012 – Dollar strong whilst fiscal cliff and Euro problems loom
GBP/USD – 1.5896
Sterling performed relatively well against the majority of currencies on Friday, helping to erase some of the losses seen earlier in the week. Growing speculation that the Bank of England is likely to increase quantitative easing to help boost the economy had seen sterling fall against the euro and US dollar throughout the week. On Wednesday we will have the minutes of the last meeting of the Monetary Policy Committee released and we will see if the markets speculation has some substance. This week sees little data released from the United Kingdom apart from on Wednesday when we have public finances data released. Expectations are for a significant reduction in the government’s borrowing requirement from the previous month. Please call in to get a detailed update from your trader.
The US dollar was one of the best performing currencies on Friday due to its safe haven status as markets remain cautious due to the looming fiscal cliff and the on-going problems in Europe. Data released showed that industrial production had fallen by 0.4% when slight growth had been expected. This week’s main releases includes existing home sales, building permits, unemployment benefits and the Chairman of the Federal Bank is also speaking. Until we have some resolution regarding the so-called fiscal cliff, the situation in Greece and a potential Spanish bailout, one would expect the US dollar to remain relatively strong; but, there are no certainties in such a volatile market. Call in now to speak to a trader.