USD/GBP Rate & Comments for 13th August 2010
USD/GBP – 1.563
It has been a mixed week for sterling which ended the week up against the euro and down against the US dollar as a fresh wave of risk aversion hit global markets. Sterling hit a new 6 month high of $1.5999/ £1 on Monday but then dropped to a 2 week low of $1.5565/£1 on Thursday. The reason for this sudden increase in risk aversion was as a result of Wednesday’s Bank of England quarterly inflation report. This was a key assessment of the new government’s spending cuts and tax hikes and as a result, growth forecasts were slashed and inflation is expected to be well within the target 2% level within 2 years. More importantly, the Bank left the door wide open for further emergency Quantitative Easing if it is needed. This left financial markets concerned over UK recovery. Poor housing data and lower consumer confidence added to sterling’s problems and the strength against the Euro was related to risk aversion caused by the US economy. Call in now to ensure you don’t lose out on further poor market movements
Against the US dollar, sterling jumped to a 6 month high against US dollar this week, but since Monday sterling has been on a downward trend after the Federal Reserve announced further Quantitative Easing. On Wednesday, the decision was made that the US economy had underperformed for the last quarter and as such, it needed a further boost. As a result, risk aversion is back in play and there is strong demand for the safe haven US dollars despite major concerns over the US economy. Now might be a good time to secure prices to stop the market moving further against you as some analysts are predicting a return to the $1.40s. Today could be interesting too, as according to some research, an estimated 17-21 million people in the USA are afflicted by a fear of Friday the 13th (or friggatriskaidekaphobia) and the US economy loses between $800-$900m as people become too afraid to leave the house – ensure you don’t miss out by speaking to a trader today.
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