Weekly US$ rates and comments - week commencing 4th August 2008

It was another week of mediocrity on the markets for Sterling as the onus had been shifted to achieving some stability in the economy. For all of the unflattering economic data that was released over the last week, it has been the consistency of equally poor data from the Eurozone that helped keep the pound with its head above the water. Energy prices soared from some of the UK's largest suppliers and further inflationary issues are keeping the Bank of England's hands tied over making a much needed cut in interest rates to boost growth.

 

The Federal Reserve meets on Tuesday and it is widely expected that rates will be kept on hold. The US$, currently at 1.9689/£1, has been supported by a drop in the price of oil and reports that the economy picked up during the second quarter of this year. With the US dollar still substantially weakened from the fall-out of the last year, it has been US exports that have helped contribute to it's recent performance and prop up its improved GDP figures.