USD/GBP Rate & Comments for 7th July 2010

USD/GBP - 1.508

Sterling rose overall against the US dollar but fell against the euro as investors bought riskier investment assets as concerns eased over the global recession. Sterling jumped above $1.52/£1 in early trading as data in the USA came in worse than expected. This left sterling within spitting distance of Friday’s 9 week high of $1.5230 and prompted some analysts to suggest that there is scope for the pound to strengthen towards $1.55/ £1 if the conditions allow it, however this is likely to take some time. The pound fell to 1.1990/ £1 as improved sentiment towards the euro saw investors moving funds into riskier investments in the region. This morning however, data showing a decline in jobs growth has seen the pound lose ground again and in addition, the UK Shop price index has shown a decline in the growth of retail inflation for June. Out later today there is Halifax house price survey data which has been rescheduled to be released today. This data can cause volatility – especially as housing data has disappointed recently. Call in now for a price.

In the USA, yesterday saw the US dollar decline as global risk appetite improved after concerns over the recovery eased. US stock markets were up 2.8% by late afternoon which prompted investors to move funds to ‘higher risk’ currencies – including the euro, pound and ‘commodity’ currencies such as the AUS dollar. However, since opening this morning, the US dollar has recovered ground as stock markets fell overnight following poor US service sector growth. Out later today there is very little data so expect the US dollar to trade on sentiment. Call in now for a live exchange rate.

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