USD/GBP Rate & Comments for 21st September 2010

USD/GBP - 1.551

Sterling fell to a 7 week low against the euro yesterday after poor UK data highlighted a slow UK recovery. Data showed that lending to businesses dropped for the 5th consecutive month in July and mortgage approval data showed the lowest number of new mortgages in over a year. Figures also showed that monetary supply – or the amount of money in the economy – dropped by 0.2% in August. All of this led investors and analysts to question the UK’s recovery further and saw renewed calls for an additional round of Quantitative Easing from the Bank of England to stimulate the economy. This saw sterling drop to 1.1887/£1 before recovering marginally to end the day above 1.19/£1. Against the US dollar, sterling slipped to a low of $1.5526/£1 despite holding firm above the $1.56/£1 level over the weekend. Out today, there is key public sector borrowing figures which are highly anticipated and will cause sterling movement. Make sure you don’t miss out by speaking to one of the team today.

In the USA, the US dollar has been under further significant pressure yesterday ahead of today’s Federal Reserve interest rate decision. Concerns that a further round of emergency stimulus will be pumped into the economy saw gold reach a record high – testament to the level of uncertainty and concern that is prevalent in the marketplace. Aside from the interest rate decision, today sees new build housing data and building permits figures. All in all a lot in the pipeline, so make sure you have protected yourself by speaking to one of the traders ASAP.

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