USD/GBP Rate & Comments for 16the September 2010

USD/GBP - 1.559

Sterling performed well against the US dollar yesterday as traders bought the pound following an increase in employment. Early data showed an unexpected rise in the number of people claiming unemployment benefits which saw the pund drop to its lowest level against the euro since early July. However, when figures showed that the number of people in work rose by a record 286,000 to July, investors shook off earlier concerns which saw sterling rise to a daily high of $1.5650/£1 against the US dollar. In an address to the Trades Union Congress, Bank of England Governor Mervyn King said that the Bank “stood ready to act” if the economy needed further stimulus, but gave no clues as to whether they were preparing a fresh round of Quantitative Easing – leaving traders to wait until the Bank of England minutes are released next week. In terms of data, today sees monthly retail sales data and consumer inflation expectations. Speak to one of the team today to take advantage of higher US dollar prices.


In the USA, the US dollar had a turbulent day – especially against Japanese yen. Yesterday saw the Japanese yen rise to a 15 year high against the US dollar of JPY 83/ $1 after PM Naoto Kan’s victory in the leadership election. With much of Japan concerned over the impact that an incredibly strong yen will have on their export led economy, victory by Prime Minister Naoto Kan in Monday’s leadership election had a huge effect. The PM beat rivals who had been arguing for moves to weaken the currency and as a result of his victory; many thought there would be no intervention. However, overnight Japan started selling large amounts of yen in order to weaken the currency and protect exports. The US dollar rose by 3.3% against yen after Japan bought a reported $17.7bn. 2004 was the last time Japan intervened in the open markets. Call to speak about how using Order to Buys can take advantage of such volatility.


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