Weekly US$ rates and comments - week commencing 23rd February 2009

All in all last week was a quiet week for sterling with few significant events or data releases to move the markets.  Having kept within a steady range against the US$ and edging up by a couple of cents on the euro over the week, a period of stability is perhaps a positive given how volatile exchange rates have been over the last eighteen months. The positives for the UK economy were better-than-expected house price figures and retail sales. However, the Bank of England revealed in the minutes from their last meeting on interest rates a unanimous vote in favour of quantitive easing to stimulate the economy. This promise of printing more money to increase supply from the lending banks did not cause any immediate harm to sterling's value but may not be looked upon favourably should this policy be enacted in the difficult months ahead.

 

 

An equally quiet week for the US$, currently at 1.456/£1, started on Tuesday with the markets closed for Presidents day last Monday. For the first time in fifty years US inflation reached 0% in January as 'price increases' on fuel and many other US staples disappeared given the US$'s consistent strength on the global markets. The US$ maintains a strong level against all major currencies thanks to the safe-haven status it has shared with the Japanese Yen and Swiss Franc in these unpredictable times. However, there is a lot economic data out this week so we wait to see what this brings.