USD/GBP Rate & Comments for 19th April 2010

USD/GBP - 1.524

Sterling fell towards the end of last week following the first Prime Ministerial election debate, as the strong performance by Nick Clegg raised the prospect that neither Labour nor the Conservatives would gain an outright majority at the election. Fifty one percent of respondents in a YouGov poll felt that the Liberal Democrat leader had come out on top leading to fresh concerns that a hung parliament would hamper efforts to put in place a cogent plan to clear the deficit. It is a busy week for economic data, with inflation data out on Tuesday, the Bank of England minutes and jobless claims data out on Wednesday, retail sales on Thursday and the first estimate of first quarter gross domestic product out on Friday. The trade deficit and industrial output has come in better than expected recently, so a positive GDP figure is expected. Despite this, there is a lot of potential for volatility this week so get in touch now for a price.

In the USA, following the indictment of the investment bank Goldman Sachs for investment fraud, the US dollar is enjoying a safety-linked boost this morning – currently trading at $1.5230/ £1. In addition, Fed Chairman Ben Bernanke seemed more upbeat last week about US recovery prospects when he addressed US Congress. Out today we have US ‘leading indicators’ for March which are expected to show a continued month on month improvement. Caution is advised however, as high unemployment and weak credit have not disappeared. Call in now for a price, as there is potential for large movements this week as risk appetite and aversion drives large swings between sterling and US dollar.

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