USD/GBP Rate & Comments for 6th September 2010

USD/GBP - 1.538

Sterling suffered last week as fundamental data showed signs that the UK recovery is abruptly running out of steam. Purchasing manager data gives a bearing on how much companies are buying and is a useful tool in gauging the relative health of the economy. This came in at the lowest level for 9 months. In addition, Nationwide house price data showed that house prices dropped by 0.9% last month – the second consecutive monthly drop. New construction orders also fell by 14% on Friday which added further concern to investors over the growth prospects in the UK economy as the spending cuts take effect. It is a busy week this week, with manufacturing data, wholesale inflation, retail sales and the Bank of England interest rate decision. There is likely to be significant volatility and the outlook doesn’t look ideal for sterling strength. Call in now to ensure that you have protected yourself and your upcoming payments.

In the USA, Friday’s Non-Farm Payroll figures showed that the US economy shed only 54,000 jobs last month beating analyst expectations of a 100,000 drop. Despite significantly beating expectations and seeing a slight surge in risk appetite, the fact remains that the US economy is still shedding jobs at a significant rate as the employment rate edged up to 9.6%. There is no data out today, as US markets are closed for the Labour Day public holiday. As a result, expect relatively thin trading so call in now to ensure that you get the best price on your foreign payments.

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