Currency Rates

US$/GBP – 1.503

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The Bank of England kept interest rates on hold at 0.5% and kept emergency funding on hold by voting not to expand their liquidity programme. After a rollercoaster week for sterling which has seen a swing of 7 cents against the US dollar, the market reaction to the decision was muted. At the start of the week, sterling suffered considerably on concerns that the upcoming election would see the first hung parliament in over 30 years. Investors sold sterling heavily on Monday as a hung parliament would lack the requisite majority to put through the tough legislation needed to clear the deficit and get the UK back on track. However, Wednesday saw UK service sector activity at the highest level for 3 years and consumer confidence at the highest level in over 2 years. This helped bring sterling back above $1.50/ £1 and 1.10/ £1 and whilst yesterday saw marginal improvement against both the euro and US dollar, house price data published yesterday showed that prices dropped by 1.5% in February. This prevented the pound from pushing much higher. This week has shown the importance of being in touch with a currency specialist sooner rather than later, as the volatility experienced by many who have held out has severely impacted their purchases. Today, we have inflation data for the month and US unemployment data – both of which have the potential to cause significant movement. Get in touch now to make sure you don’t lose out.

In the USA, the US dollar fell marginally against the euro and sterling following the rate decisions in the UK and Europe. Pending home sales fell, but this is easily attributable to poor weather and seasonal factors. Unemployment claims fell marginally, but the focus is now on today’s Non-Farm Payroll data. This is expected to show unemployment rose 0.1% to 9.8% from last month. We have had a taste this week of what negative sentiment can do to the pound. If you have US dollar payments to make in the next few months, there is still an expectation that sterling will drop to the mid $1.45/ £1 range. Get in touch now to fix a rate and avoid losing out. Have a great weekend.

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