Weekly US$ rates and comments - week commencing 14th April 2009

With the main focus of last week a rather predictable decision on interest rates from the Bank of England (BoE) sterling enjoyed a rather more stable period on the markets than events in previous weeks had allowed. There was no direct mention of further 'unconventional' monetary policy, such as quantitive easing, in the announcement and so despite a brief wobble ahead of the release sterling maintained its levels and looked to finish the week unscathed. There was little other UK economic data of note and so investor confidence and risk aversion continued to strongly influence sterling's position on the market, closing the shortened week roughly 1% higher against the euro and fractionally down against the US$.

 

 

The US$ sits at US$1.488/£1 interbank and its value on the markets has been almost entirely controlled by the risk-appetite/aversion phenomena with economic data barley showing any effect to rates of exchange regardless of how good or bad the data. However, the news of how a significant drop in imports from Asia has helped bring the US trade deficit (in February) to its lowest level in almost 10 years would certainly have been encouraging news for US economists. Other significant economic data was sparse in the wind-down to the long Easter weekend so prices against sterling were quite stable and small gains were made for the US$ against the euro.