Currency Rates

US$/GBP – 1.500

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Despite recovering after Monday’s poor performance, sterling failed to move above $1.50/ £1 or 1.11/ £1 and ended the day lower as fresh opinion polls showed that the UK is heading for a hung parliament at the next election. Whilst sterling did not break through the lows of Monday, there is likely to be a lot of uncertainty for sterling until the result of the up coming election is settled as neither the Conservatives nor Labour could have the requisite majority to take the harsh action required to deal with the UK’s ballooning deficit. Tory leader David Cameron made it clear that maintaining the UK’s AAA credit rating was a top priority if they were voted in and they would start to cut the deficit within 50 days of an election. He also stated that a re-elected Labour government would see sterling sent into a tail-spin, as Labour would not cut spending. Whilst this rhetoric makes sense, the market reaction was muted as investors focused on the opinion polls. Today, there is key data on the UK services sector which will be the primary focus before attention shifts to the Bank of England’s rate decision tomorrow. With some commentators predicting the pound will drop to $1.43/ £1 now is the time to get in touch to avoid losing money – especially as sterling is at 25 year lows against the Australian dollar and Canadian dollar.

In the USA, the US dollar posted modest gains against the euro and sterling following from Monday’s biggest percentage gain against the pound in 4 months. With little data out, investors are looking to today’s ADP employment change and Friday’s Non-Farm Payroll employment report. At the moment, regardless of whether data is good or bad, the US dollar seems to strengthen – leaving investors with no choice but to buy dollars ahead of important economic announcements. Get in touch now – one analyst expects the US dollar to strengthen to $1.43/ £1. Now is the time to secure dollars if you need them.

Call 0808 163 0102 or +44 (0) 207 898 0541 from outside the UKor fill out our quote form: http://www.smartcurrencyexchange.com/quote.aspx