USD/GBP Rate & Comments for 16th June 2010

USD/GBP – 1.476

Sterling had a mixed day yesterday, falling after CPI inflation data came in slightly under what had been expected. Markets were anticipating an annual rate of inflation of 3.5% and when the data showed 3.4%, investors sold the pound. This saw sterling fall to a low of $1.4684/£1 and 1.1998/£1. However, later in the afternoon the pound staged a late surge as appetite for riskier assets returned. This saw a high of $1.4835/£1 and 1.21/£1. Despite falling, inflation is still ‘disappointingly high’ – according to analysts at Investec – and should see some interesting debates over monetary policy over the next few months. Whilst interest rates are unlikely to rise anytime soon, the next major move will be to officially end the ‘quantitative easing’ programme which is (as it stands) ‘on hold’. Watch this space. Out today, we have unemployment data on the change in the claimant count and governor of the Bank of England Mervyn King speaks in London this evening. Get in touch now and discuss your requirements with a currency specialist.

In the USA, risk appetite and aversion yet again drove the US dollar movement yesterday. With import prices improving against expectations, there were signs that the US economy is on its way to recovery. Out later today there is data on building permits and also purchasing manager data. With the current levels of volatility against sterling, Smart is able to help you target a specific exchange rate by using Orders. Call in now to discuss how we can automatically buy when the rate hits your budgeted level.

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