Sterling lost a bit of ground against the safe haven currencies as expectations of a UK interest rate reduction grew. This was on the back of the Bank of England confirming that funding problems were critical and that they were willing to both make additional liquidity available [i.e. make cash available to the banks] and interest rates more accommodative [i.e. reduce them]. Funding problems are hurting the mortgage market with less cash available and lending rates being increased. Annual house price increases are non existent [at best]. So sterling potters along with no real upside potential, short to medium term, especially against the safe haven currencies.
The US$ sits at US$1.985/£1 inter bank. At the start of the week the US$ was pushing towards all time lows against the Euro but towards the end of the week has benefited from US$ repatriation as we approach the end of the first quarter. Impossible to identify any good news from the US with which to offer longer term solace. Consumer confidence is shot, house prices and the stock market are falling and the Fed is desperately working/hoping that there are no further bank bailouts. Not a good time for the US$. However, does the UK look any brighter. Probably not, so don't expect sterling to gain against the US$.
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