Currency Rates

US$/GBP – 1.512

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Sterling rose yesterday following a slight upturn in inflation expectations, but negative sentiment over the economic and political situation in the UK still remains. Despite Thursday’s modest upswing, which saw the pound hit a high of $1.5065/ £1 and 1.1035/ £1, many analysts expect sterling to remain under pressure in the run up to an election. The markets are still looking for a clear plan to clear the UK deficit and Gordon Brown’s comments yesterday did not help. The Prime Minister felt that the UK economy was still too fragile to start cutting spending. With a budget deficit at nearly 12% of GDP, this did not go down well with the markets. There is very little other UK data on the horizon until next week, so expect negative sentiment to prevail – especially if we see further detrimental opinion polls in the Sunday newspapers over the weekend. It would seem advisable to take advantage now if you have payments due soon, as sterling is expected to fall further in the short term.

In the USA, the credit rating agency Standard and Poor’s gave the US dollar a vote of confidence yesterday stating that it would continue to be the international reserve currency as long as markets remain stable and US government spending is efficient and sustainable. The key data out today, after a fairly light week on the economic calendar, is US retail sales. After severe weather conditions across most of the country, sales are expected to drop marginally. If this is much worse or better than expected, we could see some volatility. Get in touch now to take advantage of the rates and avoid missing 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