USD/GBP Rate & Comments for 5th May 2010

USD/GBP - 1.513

Sterling had a mixed day yesterday falling to a 5 week low against the US dollar of $1.5090/ £1 and gaining against the euro to finish the day well above the 1.16/ £1 mark. The pound suffered over concerns that the crisis in Greece and subsequent bail out would spread to other countries. The FTSE stock market fell as bank shares suffered Greece related selling and mining companies fell as Australia announced a potential new tax on mining operations. This caused investors to sell the pound and buy US dollars. Lower than expected data on lending also added to sterling’s woes against the US currency as figures showed that month on month lending to individuals fell by £1.8bn and new mortgage approvals dropped by 3,000 on last month. Out today we have house price data from the Halifax and data on the construction sector. The election is still the biggest issue in the short term – call in now for a live exchange rate.

In the USA, the number of pending home sales rose by 5.3% - more than the 3.9% that was forecast and monthly factory orders unexpectedly showed a rise of 1.3%. This led to investors speculating that the US Federal reserve would look to raise interest rates much sooner than first thought, and prompted increased demand for the US dollar – especially when combined with the drop in sentiment in the Euro zone and concerns over a hung parliament in the UK. Get in touch now to avoid missing out as we could see the pound drop into the $1.40s against the US dollar again.

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