USD/GBP Rate & Comments for 1st July 2010

USD/GBP - 1.490

Sterling had a poor day today, falling back below $1.50/ £1 against the US dollar and dropping by over 1% against the euro back below 1.22/ £1. The reason for sterling’s poor performance was mainly down to the fact that the pound has performed so well over the last few days – especially against the euro. As a result, many speculators that had been betting on sterling strength decided to lock in their profits, which saw funds flow back out of sterling and saw sterling fall. In addition, the pound was hit by weaker than expected housing figures which showed that prices rose by a mere 0.1% on the month. Bank of England policy maker Adam Posen added to the pound’s woes as he issued a warning over the UK economy’s fragility – in stark contrast to his colleague’s rather ‘hawkish’ comments (i.e. arguing for interest rate rises). There is a lot of volatility – speak to a trader now about how Order to Buys can help you target specific rates throughout the day and overnight.

In the USA, the S&P 500 stock market dropped below a key level of 1,040 with expectations that this will drop further towards 1,015. This drop cemented the worst quarterly performance for over a year and has seen the US dollar strengthen as investors move towards the safer haven assets of the US dollar. ADP unemployment data was worse than expected. There is further unemployment data out today which will give a better picture in the run up to tomorrow’s Non-Farm payroll. Call in now for a price, as we could see the US dollar gain further.

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