Weekly US$ rates and comments - week commencing 29th October 2007

 

Not a great week for sterling losing ground it seems against everything apart from the US$. The Bank of England warned that the UK remained vulnerable to shocks from the global credit squeeze which isn't a surprise and certainly wasn't a help to sterling. The housing market continues to suffer here in the UK with a significant reduction in mortgage approvals and it appears to be a buyers market. Also the market is beginning to believe that UK interest rate reductions are likely sooner rather than later. A period of uncertainty for sterling.

 

 

The US$ has pushed through US$2.05/£1 and is now sitting at US$2.056/£1. The housing market is a real mess and makes the UK housing market look good. However, what has been interesting is that although the US economic data has been poor the US$ has not lost huge amounts against sterling. So we may be in a situation where the US$ could see some upside against sterling on the back of good news out of the US. Further US interest rates cuts are expected soon, the first one happening possibly this week.