Weekly US$ rates and comment - week commencing 19th November 2007

Sterling had a poor week. The Governor of the Bank of England stated that economic growth next year was going to be poor and that UK interest rates were going to be reduced. Retail figures were also poor and the net effect was that sterling lost ground against both the Euro and the US$. The market is wondering if UK interest rates could be reduced as early as December. Various economic figures out this week and we will have to wait and see what happens to sterling but a bit like the US$, sterling has few friends. We are in very interesting times.

 

The US$ regained a bit of equilibrium against sterling [US$ 2.0459 inter bank] but this was more on the back of sterling’s poor showing rather than anything great coming out of the US. The credit crunch and sub prime loan problems are still there and unlikely to disappear any time soon. However, US exports are benefiting from the weak US$. My feeling is that we will see the US$ move back towards the US$2.10 mark.