GBP/USD September Currency Update
Oct 11th 2010, 9:57 am
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GBP/USD September Currency Update
Last month, we had contrasting reports on the state of the UK economy with a rare round of praise from the IMF in reaction to the Government’s deficit reduction plan; however at the same time Adam Posen from the MPC commented that more quantitative easing was required to avoid a Japan-style slump.
In terms of economic data we saw further mixed messages with the final reading for Q2 confirming growth at 1.2% for the quarter, whereas the more recent snapshots from the UK economy point to slowing momentum in the recovery with the manufacturing sector reporting a 10-month low in activity.
This race to the bottom that we are experiencing at the moment in the currency markets has led the US dollar index to a 10-month low as volatility returns to the FX markets after the summer break.
With both the UK and the US Governments warning of further quantitative easing, GBP/USD having rallied close to its previous 1.60 high, seems quite settled at these higher levels.
From now till the end of the year the focus will be on the economic data to see whether there is any deterioration in both the US and UK economies and October employment report from the US will not only be the latest snapshot of the labour market, but will be a key barometer reading for investor sentiment towards the US economy.
Current Central Bank Rates:
US (Federal Reserve): 0.25%
UK (Bank of England): 0.50%
GBP/USD Highs & Lows of September:
High: 1. 5926
Low: 1. 5296
A movement of: 4.12%
Difference this would make on £200k
High: $318,520
Low: $305,920
A difference of $12,600
All of the information above can be explained clearly by your personalised dealer should you open a trading facility with HIFX. To discuss your requirements in more detail and for a free currency consultation please contact HiFX plc on 01753 859 159 or email [email protected].
Kind regards
Mark Bodega
Director - HiFX
In terms of economic data we saw further mixed messages with the final reading for Q2 confirming growth at 1.2% for the quarter, whereas the more recent snapshots from the UK economy point to slowing momentum in the recovery with the manufacturing sector reporting a 10-month low in activity.
This race to the bottom that we are experiencing at the moment in the currency markets has led the US dollar index to a 10-month low as volatility returns to the FX markets after the summer break.
With both the UK and the US Governments warning of further quantitative easing, GBP/USD having rallied close to its previous 1.60 high, seems quite settled at these higher levels.
From now till the end of the year the focus will be on the economic data to see whether there is any deterioration in both the US and UK economies and October employment report from the US will not only be the latest snapshot of the labour market, but will be a key barometer reading for investor sentiment towards the US economy.
Current Central Bank Rates:
US (Federal Reserve): 0.25%
UK (Bank of England): 0.50%
GBP/USD Highs & Lows of September:
High: 1. 5926
Low: 1. 5296
A movement of: 4.12%
Difference this would make on £200k
High: $318,520
Low: $305,920
A difference of $12,600
All of the information above can be explained clearly by your personalised dealer should you open a trading facility with HIFX. To discuss your requirements in more detail and for a free currency consultation please contact HiFX plc on 01753 859 159 or email [email protected].
Kind regards
Mark Bodega
Director - HiFX
