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Weekly Currency Update - GBP/USD Week ending 21st August

Weekly Currency Update - GBP/USD Week ending 21st August

Old Aug 24th 2009, 2:24 am
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Default Weekly Currency Update - GBP/USD Week ending 21st August

Hi All,

As promised here’s a brief update on what’s been happening with the US Dollar over the last week.

Last week was relatively non-eventful despite some more surprises from the Bank of England, a little angst about the UK public finances and some rocky stock markets, with GBP/USD only managing a 1.63 – 1.66 range.

The Bank’s story started with their targeted inflation measure, CPI, holding steady at 1.8%, despite the market’s expectation of a fall and the Bank’s public disquiet over the potential for deflation. The next day, their 6-3 vote for the additional £50 billion of quantitative easing momentarily induced a few Sterling traders to bid up the Pound, thinking that there had been 3 dissenting votes for no additional easing. Actually the 3 votes were for £75 billion of extra firepower and they included the ultra-cautious Governor Mervyn King.

Thursday brought good news on the UK official July retail sales which maintained a run of positive numbers at +0.4%, taking the annual rise to 3.3%. This potential boost for Sterling was undermined by the Government’s finances falling into a massive £8 billion deficit in July, from a £5 billion surplus in June. This was the first July deficit since 1996 although you might ask what else would you have expected when the Treasury are doing their utmost to stimulate us out of a deep recession. Anyway, it made Sterling wobble again.

The main influence on the Dollar was again the stock markets with the collapsing Chinese market (down 20% in the past month) dragging the other main markets down, though no where near the same extent, keeping the Dollar popular early in the week. By Friday it was all change again when Ben Bernanke suggested the US was on the verge of recovery and that the prospects for near term growth were good. Equities and oil rose strongly on these comments.

USD Movement – High’s & Low’s of last week (17/08/09 – 21/08/09)

High’s: 1.6626
Low’s: 1.6276

A movement of: 2.15%

Difference on £200K

High: $332,520
Low: $325,520

Difference of: $7,000

Whilst FX isn't the most thrilling of subjects, the sooner you begin to think about your money transfers, the more likely you are to make your money go further.

A further update will be added next week.


Mark Bodega
Director - HiFX
Windsor2 is offline  

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