USD/GBP Rate & Comments for 2nd August 2010

USD/GBP - 1.578

It was a strong week for sterling – especially against the US dollar. The pound has already breached the 5 month high of $1.57/ £1 that was seen on Friday. The reason for sterling’s strength was that the previous week, GDP data exceeded expectations to show 1.1% growth for the 2nd Quarter in the UK. Also, Retail sales data was far better than expected last week. Investors now feel better about the UK’s prospects. However, Bank of England chief Mervyn King was still cautious, stating that the ‘UK economy still faces significant headwinds’. He stated that there was still a possibility that interest rates could go down or more money could be pumped into the economy. Overall though, it was a strong week for sterling, but areas for concern still remain. Ahead today, there is manufacturing purchasing manager data which is expected to show an improvement. Call now for a live price to ensure you don’t miss out.

Sterling jumped by nearly 6 cents against the US dollar last week after the release of UK GDP data and retail sales data. This morning, the pound has already hit $1.5790/£1. After strong UK data and relatively weak US data, investors now see the UK as a better investment. The US dollar did strengthen briefly last week after strong US housing data, but US unemployment claims were fairly unimpressive. The big data of the week was Friday’s GDP data, which showed that the US economy grew by 2.4% in the last quarter. This was worse than expected and shows a fall from last quarter’s figure of 3.7%. The US recovery is stalling, but there is still scope for volatility over the next few months. This week we have a wide range of data including non-farm payroll data. Many clients have been taking advantage of better GBP/ USD rates – ensure you don’t miss out and speak to us now.

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