USD/GBP Rate & Comments for 8th July 2010

USD/GBP - 1.517

Sterling had a good day yesterday, recovering lost ground against the US dollar and euro as a recovery in UK shares on the FTSE stock market helped ease concerns over the fragility of the economy. Data on UK jobs growth was relatively poor and this put a cap on the strengthening pound. Against the euro, the pound was broadly stronger but sterling seems to have lost the post-budget momentum as gains related to sentiment have given way to concerns that the tax hikes and spending cuts will dampen growth and harm the UK recovery. Many analysts are concerned that the government will struggle to effectively implement the spending cuts, with industrial action being a potential stumbling block. Despite these concerns, the pound has strengthened this morning to a 2 month high against the US dollar as sentiment towards the Euro zone improves and investors look to ‘riskier’ assets in the UK and Euro zone. The big event today is the Bank of England interest rate decision. The rate is expected to stay the same and the emergency funding is likely to remain on hold. However, if this does change, there will be considerable volatility. Call in now for a live exchange rate.

In the USA, there was a lack of data released in the region yesterday, and the US dollar traded on sentiment. Similarly today, there is very little relevant data as the US dollar takes a back seat ahead of a busy set of data from the UK and Euro zone. Already this morning, the US dollar has given away ground to other currencies on risk sentiment movements. Get in touch now to avoid missing out on the best rates.

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