USD/GBP Rate & Comments for 22nd July 2010

USD/GBP - 1.521

Sterling fell yesterday after the minutes from the Bank of England’s latest policy meeting on interest rates showed a dampened outlook for growth. As a whole, there was a lack of confidence from the policy makers as further quantitative easing (injection of money into the economy) was discussed. Despite a general agreement that inflation would stay stubbornly high, the committee felt that the outlook for growth was poor. Against the US dollar, the pound slipped back below $1.52/ £1 and despite a strong start against the euro, the pound fell back below 1.19/ £1. One member – Andrew Sentance – yet again called for a 0.25% rise in interest rates, and some analysts expected that he would be joined by another member calling for increased rates. However, the vote showed that all 7 other members voted for rates (and the emergency funding programme) to be kept on hold for another month. Out tomorrow, there is monthly retail sales data which is expected to show a 0.5% rise. However, this could see an unexpected World Cup related boost. Call in now for a live exchange rate, as rates are likely to be volatile ahead of the GDP figures which are released on Friday.

In the USA, the US dollar strengthened yesterday as strong earnings data from the US stock markets helped drive demand for the US currency. iPhone makers Apple announced stronger than expected earnings and an upbeat earnings forecast, and several other companies also posted strong results. However, concerns over Fed Chairman Ben Bernanke’s half-yearly monetary policy speech to the US Senate tempered the dollar’s rally as investors were concerned that the recent poor data would impact on monetary policy and see the Chairman go back on the exit strategy he had outlined earlier in the year. Out today, there is unemployment claims data and existing homes sales data. Get in touch now for a live price.

Exchange rates change every second - call Smart Currency Exchange for a live up-to-the-minute quote. For individual requirements, visit the SmartCurrencyExchange.com website and for companies visit the SmartCurrencyBusiness.com website.