USD/GBP Rate & Comments for 4th August 2010

USD/GBP - 1.593

Sterling hit a new 6 month high against the US dollar yesterday after improved sentiment towards the UK and concerns over the state of the US recovery. The pound hit $1.5968/£1 at lunchtime yesterday, buoyed by robust bank earnings data and recent strong UK economic data from the manufacturing sector and better than expected growth figures on Friday. However, sterling’s run was held back after construction activity data fell to a four month low. As a result, sterling stopped just short of the key level of $1.5970/£1, which is an important ‘technical’ recovery point from May’s $1.4225/£1 low. Whilst we might see sterling push through this level after today’s service sector data (which is expected to show growth) there is expected to be strong resistance at the $1.60/£1 level – firstly from a psychological perspective, and as there are reportedly numerous ‘sell’ orders set to trigger at that price, which will see sterling drop should we hit that price. Either way, get in touch now to ensure you are taking advantage.

In the USA, personal spending and income figures came in worse than expected; pending home sales fell by 2.6% on the month and factory orders for the month dropped by 1.2% – again, far worse than expected. In addition, Ben Bernanke alluded to further emergency funding in a speech last night in order to jump start the US recovery after several months of poor US data. This added to the US dollar’s woes. Ensure you don’t miss out – especially if you need to move US dollars into sterling at any point in the future.

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