USD/GBP Rate & Comments for 9th August 2010

USD/GBP - 1.594

Last week was a strong one for sterling – especially against the US dollar where the pound finished up 1.74% on the week. We saw sterling hit a 6 month high of $1.5999/ £1 against the US dollar on Friday after poor US employment data showed a worse than expected decline in July. As expected, last week saw the Bank of England Monetary Policy Committee keep interest rates and the £200bn asset purchase facility on hold. This week sees the publication of the Bank of England’s inflation report on Wednesday, which should give some idea of what the bank is likely to do with monetary policy over the next few months. Many are expecting an upward revision to the interest rate forecast, but growth expectations following the new government’s spending cuts are likely to be key. Also out on Wednesday is unemployment claimant count data. Call in now for a live exchange rate.

In the USA, concerns over the US recovery were compounded on Friday after July’s Non-Farm Payroll figures showed a drop of 131,000 jobs on the month against an expected drop of 63,000. In addition, June’s figures were revised downwards by almost 100,000. This was clearly a disappointment for the markets – especially with the US interest rate decision tomorrow, and the poor figures fuelled speculation that the Federal Reserve will take further action to stimulate the economy. There is little other data out today – ensure you are taking advantage of the best prices by speaking to a trader today.

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