USD/GBP Rate & Comments for 28th July 2010

USD/GBP - 1.558

Sterling continued to strengthen to a 5 month high against the US dollar after better than expected retail sales data boosted the pound further off the back of last week’s strong GDP data. Sterling hit a high of $1.5570/£1 as better than expected bank earnings data saw investors look to riskier investments away from ‘safe haven’ US dollar holdings. UBS beat profit forecasts and Deutsche bank delivered stronger than expected results after a fall in losses from loans. However, the same appetite for risk that saw the pound strengthen so much against the US dollar kept the pound below 1.20/£1 as the euro is the more ‘riskier’ investment option when compared to sterling. Later today, the Monetary Policy Committee appears before the Treasury Select Committee to present on monetary policy and growth expectations. Some analysts are fearful that given the recent minutes of the Bank’s last meeting, the rhetoric is likely to be negative which could impact sterling. Get in touch now for a live exchange rate.

In the USA, consumer confidence fell by more then expected posting a figure of 50.4 against an expectation of 51 in polls. With fiscal and monetary stimulus fading, concerns over the labour market and market concerns over European sovereign debt, the US recovery is seemingly faltering and as a result it is no surprise that confidence fell. This saw investors look to the pound and the US dollar fell off considerably yesterday. Out later today there is data on durable goods orders which gives a good idea of business optimism. Call in now for a live exchange rate.

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