A bit like the previous week sterling had a good end to the week. The major factor at the end of last week was weakness in German business confidence. Also the minutes of the last Bank of England meeting were released and they showed that two members of the committee voted against reducing UK interest rates which was a surprise. So relative to the last few months the last two weeks have seen a bit of stability for sterling. How long this will last or if this is the base for sterling from which to regain lost ground is too soon to say.
The US$, which sits at US$1.981/£1 inter bank, is getting support from the growing conviction that the Fed will stop reducing US interest rates after the end of this month. This is in contrast to the UK and Euro land where the expectation is for interest rate reductions whether in the short or long term respectively. Also there was an unexpectedly large fall in US jobless claims which has also supported the US$. The US is far from being out of the woods but the feeling in the market is that there is upside given the rapid action of the Fed in cutting rates earlier this year.
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