USD/GBP Rate & Comments for 5th October 2010

USD/GBP - 1.580

Sterling recovered against the euro on Monday as better than expected construction data helped investors feel more confident in the UK recovery. Construction PMI data showed that construction activity picked up in September, rising to 53.8 against an expectation of a fall to 51.6. Concerns over the ‘peripheral’ European countries also saw the euro suffer, but the atmosphere is still nervous ahead of Thursday’s Bank of England interest rate after last week’s comments by Adam Posen. The Bank of England policymaker made clear last week that a fresh round of Quantitative Easing should be used to pump more money into the economy and provide stimulus for growth. This contrasts with Andrew Sentance, who has been voting for a 0.25% rise in interest rates for the last 4 meetings. Either way, the meeting has the potential to cause significant movement, so call in and speak to a trader now to make sure you don’t lose out. Key house price and service sector data is released today also.

In the USA, concerns still remain over the widely expected fresh monetary easing that is expected over the next few weeks. However, the balance of power shifted back towards the US dollar as the euro lost ground after the budgetary and growth announcements detailed above. There was some respite as data showed sales of previously owned homes rose to a 4 month high, but the effect was not long lived. The US dollar may have recovered some ground against the euro, but it slipped to a 2 ½ year low against the Swiss franc and again hovered near to a 15 year low against the Japanese yen. Speak to one of the team to make sure you take advantage.

Exchange rates change every second - call Smart Currency Exchange for a live up-to-the-minute quote. For individual requirements, visit the SmartCurrencyExchange.com website and for companies visit the SmartCurrencyBusiness.com website.