Sterling seems to be getting into a trend where it does well at the end of the week. I suppose its all relative as we are still a long way from where we were in the autumn of last year. UK manufacturing input and output prices rose to record levels in April. The feeling in the market is that this means the Bank of England will keep UK interest rates on hold at this weeks meeting as inflation will be their major concern. We wait and see.
The US$ has been doing well [again all relative] and sits at US$1.966/£1 inter bank. The Fed cut US interest rates, which was as expected. However the belief has grown that this could be the final cut, unless the US economy takes a dive, and as such the US$ gained support. The Fed outlook for the economy was less negative than previous announcements and inflation had come to the top of their agenda. Also unemployment figures were better than forecast. Is the market seeing the US economy through rose tinted glasses? It may well be because there are still major economic problems.
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