Following a quiet start to the week for market data, sterling faltered again towards the end of last week. Poor second quarter GDP and retail sales data sent the pound lower still against the US$ and to the lower end of its recent four month trading range against the euro. For the second month running the Bank of England's meeting minutes released last week highlighted a difference of opinion within the ranks of the MPC by way of a three-way split, suggesting perhaps that long-term policy remains undecided.
The recently resurgent US$, currently at 1.8460/£1 maintained the last month's gains and survived the 'profit taking' speculation that the currency would quickly rebound from its record highs. Despite heightening concerns regarding the stability of certain major lenders and the financial sector as a whole, the US$ has benefited from the recent drop in price of commodities and the continuing belief that interest rates will almost certainly be hiked by the end of the year. The Federal Reserve however, is playing its cards close to its chest.
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