USD/GBP Rate & Comments for 5th July 2010

USD/GBP - 1.517

Sterling hit a month high of $1.5230/ £1 – the strongest since early May – after US Non-Farm payroll data came in far worse than expected and investors dumped the US dollar in favour of sterling. Following the drastic first budget of the new UK coalition government, the pound has taken advantage after a string of lacklustre US data with many analysts feeling better about the UK’s chances of cutting the deficit. Overall the pound finished up 1% against the US dollar, and despite barely holding above 1.20/£1 for most of Friday after the euro performed well, the pound staged a late rally and closed just shy of 1.21/£1. Out later today there is house price data for the UK and also services PMI data that is expected to show a slight decline. Get in touch now for a live price to ensure that you do not lose out on the best exchange rates.

In the USA, the US dollar had a traumatic day after US Non-Farm payroll (seasonally adjusted unemployment data) showed a far worse fall in jobs in the region than was initially expected. Data showed a drop of 125,000 versus last month’s gain of 433,000. This followed a string of poor data from the US over the last few weeks that has prompted fears that the US recovery is faltering. There had been expectations at the start of the year that there would be an interest rate rise by the 3rd Quarter of this year. However, as it stands this looks less and less likely. This is the reason for the poor performance by the US dollar of late. The US markets are closed today for the 4th July holiday, so no data is being released. Call in today for a live exchange rate to ensure you are accurately forecasting for your upcoming payments.

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