Sterling had a steady week. The Bank of England minutes were released last week which showed there had been a 7 to 2 vote in favour of keeping UK interest rates on hold. The UK economy is certainly slowing but that is no different from others. Property prices are softening. There will be reductions in UK interest rates next year but we will also see reductions in interest rates elsewhere. Sterling continues to be fairly friendless.
The US$ also had a steady week and is now sitting at US$2.066/£1 inter bank. Thanksgiving was on Thursday and so there has been less activity than normal in the US. The feeling is that US interest rates will be reduced by the Fed in mid December and that we will see the US$ weaken as we get closer to the meeting date. The US$ continues to move ever lower against the Euro which means that US exports become cheaper by the day. Last week Airbus was complaining about Boeings pricing advantage arising out of the US$'s weakness being company life threatening. Still fairly friendless the US$ but will the world really let it collapse!
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