Sterling has been steady and has gained against most currencies apart from the US$. Economic news has been mixed with pressure on house prices and sales volume countered by a surge in production price inflation. The latter means that the market has become unsure on future cuts in UK interest rates. The central banks of the UK, US and Euro land agreed a financing package in an attempt to add liquidity to a market that was/is in danger of grinding to a halt. Still uncertain times and an uncertain future for sterling.
The US$ made gains against both sterling and the Euro and sits at US$2.012/£1 inter bank. The Fed cut US interest rates by 0.25% which was less than hoped for by the market. However, a bit like the UK, producer price inflation is on the up [in fact hitting 34 year highs!]. Also retails sales for November were stronger than expected. So there is uncertainty in the market as to the likelihood of further interest rate cuts short term. But I don't see the US$ strengthening too much further shorter term.
No comments:
Post a Comment