Pounds Dollars Exchange rates April 2008

Tuesday 29th April 2008 Interbank
G BRITISH POUND / US DOLLAR 1.9871

Oil falls back to $118.55 per barrel on back of strong dollar.

US Dollar:
The dollar benefited from a weaker euro yesterday as it managed to squeeze back under $1.56.00, currently trading at $1.5595. This was on the back of comments made by ECB members regarding inflation worries and the looming federal Open Market Committee meeting tomorrow. Investors will be watching whether the Fed will continue to be on an easing watch, or whether they’re going to be more focused on inflation going forward.

There could be an easing in terminology used, yet if the Fed were to come out and be more hawkish with their statement, the euro could well drop to $1.5500. The central bank have been cutting interest rates since late last year, slashing the yield of the dollar while the hawkish ECB supports the yield of the euro.

Data at 3.00pm: Consumer Confidence expected at 62.0 from 64.5 previous.

Monday 28th April 2008 Interbank
G BRITISH POUND / US DOLLAR 1.9801

Dollar stays strong against euro after hitting three week high on Friday.

US Dollar:
The dollar hit a three week high against the euro and a nearly two year high against the yen as investors became less sure the Fed Reserve might cut rates this week. Interest rate futures contracts indicate a quarter percentage point rate cut is still expected by markets, but the odds of such a reduction are now 74%, down from 82% Thursday and 100% a week ago. The interest rate decision is expected this Wednesday.

This Friday we have the all important April payrolls report in the US and is expected to show continued weakness in the labour market after three straight months of job reductions.

No data today. Speakers: Richmond Fed Staffers to speak at 10.30pm.

Friday 25th April 2008 Interbank
G BRITISH POUND / US DOLLAR 1.9848

US dollar gains amid speculation of a shift in interest rate stance.

US Dollar:
On Thursday the US dollar enjoyed a remarkable gain against its major rivals on a shift in US interest rates and weaker than expected eurozone data. We saw a gain of nearly 2 cents in favour of the dollar from $1.5837 to $1.5660. This is a sharp turnaround from Tuesday when the dollar dropped to a record low of $1.6020.

Against the pound there was also a gain for the greenback as we saw a move from $1.9761 to $1.9693. Data released from the US saw a demand for Durable Goods unexpectedly decline for the third straight month in March. It seems economists are now changing their Fed rate call for a 25 basis point cut at the April 30th fed meeting, instead of a 50 basis point cut.

Data at 3.00pm: U. of Michigan Confidence expected at 63.5 from 63.2 previous
 

Thursday 24th April 2008 Interbank
G BRITISH POUND / US DOLLAR 1.9761

Dollar rallies - markets expect pause in interest rate cuts after next week.

US Dollar:
On Wednesday the dollar rebounded from historical lows versus the euro as weak data weighed heavily on the euro and investors took the view that Tuesday’s dollar sell off was overdone. There was also news circulating that the Federal reserve, which is likely to cut short term interest rates by a quarter of a percentage point next week, may be ready for a breather in cutting rates further after that. If the Fed do cut rates next week, they could signal in the statement accompanying the decision an inclination to pause and asses the impact of its cuts, which have lowered the federal-funds rate to 2.25% from 5.25% since last year.

The dollar gained over 1.5 cents against the euro to trade at $1.5851 this morning and against the pound, we saw over a 2 cent gain to be trading around $1.9770 this morning.

Data at 1.30pm: Durable Goods expected at 0.1% from –1.7% previous.
At 3.00pm-New Home sales expected at –1.0% from –1.8% previous.

Wednesday 23rd April 2008 Interbank
G BRITISH POUND / US DOLLAR 1.9876

Euro dollar breaks $1.60 level as dollar continues to weaken.

US Dollar:
US Home Sales fell in the month of March, weakening the dollar even further. Home sales fell to a 4.93 million annual rate, a 2% decrease from February’s unrevised 5.03 million annual pace.

We saw the greenback hit a record low against the euro as the $1.60 level was breached for the first time, hitting $1.6018, but has fallen off slightly this morning to be trading at $1.5950. The move against the dollar in favour of the euro was also helped by speculation that the ECB may be leaning towards an interest rate hike rather than a cut.

Against the pound the dollar also dropped as the $2.00 level seemed in its sights, but again has fallen off slightly this morning to be trading at $1.9901.

No data today.
 

Tuesday 22nd April 2008 Interbank
G BRITISH POUND / US DOLLAR 1.9768

Euro nears all time highs against the dollar—talk of rate rise in Eurozone

US Dollar:
The greenback fell against the euro yesterday as it tested record lows against the single currency. It was testing the $1.60 levels, reaching $1.5948, 40 cents off its all time high of $1.5985. This seemed to be the result of speculation regarding interest rate rises in the eurozone and news of a fall in shares for Bank of America. The largest US retail bank by assets posted a 77% drop in first quarter net income on the back of the credit crunch. The dollar did benefit against the pound as cable took a nose dive around UK opening, as the cash injection by the Bank of England seemed to fall short of market expectations. The dollar began yesterday morning at 2.0028 but then gained over 2 cents to be trading at 1.9785 this morning.
Data at 3.00pm: Existing Home Sales, House Price Index and Richmond manufacturing Index.
 

Monday 21st April 2008 Interbank
G BRITISH POUND / US DOLLAR 1.9987

World oil prices threaten to go higher - OPEC rejects calls to raise output.

US Dollar:
The dollar had a mixed start to the session as it has moved up against the euro but down against the pound, falling below the key $2 level on cable. The move for the dollar against the euro started on Friday as the dollar gained on the back of growing risk for appetite for US assets after reasonable earnings reports inspired markets to believe the worst is over in the US credit crunch.

A full cent was gained from Fridays opening price of $1.5934 to be trading at $1.5835 this morning. On cable the dollar has fallen back to go through the $2 level this morning.

Sterling's gains were helped by a stimulus package to be announced by the UK Chancellor today.

No data today.
Speakers: Evans and Kroszner at 2.30pm and 6.30pm respectively.

Friday 18th April 2008 Interbank
G BRITISH POUND / US DOLLAR 1.9966

Philly Fed—Manufacturing sector sinks further into contraction territory

US Dollar:
Yesterday’s report by the Philadelphia Federal Reserve Bank said factory activity in the Philadelphia region fell to a seven-year low in early April. The index, gauge of the health of the region’s manufacturing sector, fell in April to –24.9 from –17.4 in March. Economists had expected the overall index to tick up to –15.0 in March.

The market seems to feel the Fed may only cut 25 basis points at month end. The dollars small gains it had made early in the week were all but handed back yesterday as it fell against the euro and sterling. The dollar fell back towards the all time low against the euro of 1.5979 to trade at $1.5939. Against the pound we saw a loss of over 2 cents to head back towards the $2 mark, now at $1.9975. No data. Fed’s Lacker to speak.
 

Thursday 17th April 2008 Interbank
G BRITISH POUND / US DOLLAR 1.9722

US Core CPI data matches expectations leaves room for interest rate cut.

US Dollar:
The dollar nearly hit $1.60 against the euro yesterday on the back of benign US inflation data, suggesting the Federal Reserve will have room to cut interest rates more without risking a spike in prices.

The core consumer price index, which excludes volatile food and energy costs, and is a preferred inflation indicator for the Fed, rose a mere 0.2%. The data may give the Fed a somewhat free hand to ease policy.

Other data from the US showed home construction plummeted during March, dropping to its lowest level 17 years. Housing starts decreased to 11.9% after falling 0.7% in February.

Yesterday evening there was also the data released from the Fed’s Beige book, and is a summary of economic activity prepared with information for the Fed’s 12 district banks. The book showed the US economy weakened in March as consumers curbed spending and businesses endured higher costs.

Nine out of the twelve districts indicated economic conditions had weakened since the last report. Cable is still close to yesterdays levels at $1.9702.

Data at 3.00pm: Leading Indicators expected at 0.1% from –0.3% previous. Philly Fed expected at –15 from –17.4 previous. At 2.45pm: fed’s Kohn to speak.
 

Wednesday 16th April 2008 Interbank
G BRITISH POUND / US DOLLAR 1.9720

US inflation rises at a slower rate than expected small dollar gains.

US Dollar:
The dollar has a good day yesterday as it rose against its key rivals after data showed rising US inflation and improved manufacturing activity, which suggests the Federal Reserve may be unable to lower US interest rates much further.

Much of Tuesdays dollar strength came on the back of the higher than expected producer price index which came in at 1.1%. Producer prices rose nearly twice expectations, accentuating elevated inflationary pressures as US producers are facing higher fuel, food and raw material costs.

The federal Reserve Bank of New York’s Empire State Manufacturing survey beat expectations in April coming in at 0.63 from –22.23 previous, also pushing the dollar higher.

The dollar gained over one cent against the pound opening at 1.9745 to hit 1.9625, but this morning has given up its gains with a full cent lost this morning alone.

Against the euro the dollar has stayed in its range of 1.58—1.5850.

Data at 1.30pm: Consumer Price Index m/m expec at 0.3% from 0.0% previous, Housing Starts expec at 1020k from 1065k, Building Permits & Industrial production.

At 7.00pm Fed’s Beige Book. Speakers: Fed’s Yellen, Plosser to speak.

Tuesday 15th April 2008 Interbank
G BRITISH POUND / US DOLLAR 1.9699

US Retail Sales take surprising turn upwards in March by 0.2%

US Dollar:
On Monday the dollar was marginally higher against its rivals, thanks to mildly higher US retail sales data and suggestions of German frustration with the euro.

The retail sales turn upwards was a promising sign for the economy given the punishment consumers have absorbed. Retail sales increased by 0.2% after economists had predicted a decrease of 0.1%.

The dollar is trading at similar levels against the pound this morning as sterling waits for key inflation data due at 9.30am. Against the euro the dollar is still in the 1.58—1.5850 range ahead of key economic data from both the US and the euro-zone.

Data at 1.30pm: Producer Price Index M/M expected at 0.7% from 0.3% previous, Empire Manufacturing

Monday 14th April 2008 Interbank
G BRITISH POUND / US DOLLAR 1.9706

G7 meeting highlights freefall in dollar and try to support greenback.

US Dollar:
The dollar was down on Friday against the euro on reeling risk appetite after a disappointing consumer sentiment and earnings report. Also the G7 finance ministers and central bank governors said in a statement after their meeting on Friday that there have been “at times sharp fluctuations in major currencies and we are concerned about their possible implications for economic and financial stability.” This is basically like being shown the yellow card although whether they will intervene if the dollar gets pushed lower is another thing.

A busy week for data as this week investors get a peek at inflation, the housing market and retail sales. Economists are expecting to see a weak retail sales report today, Tuesday and Wednesday bring the latest inflation measures, with the producer price index on Tuesday and consumer price index on Wednesday.

Data at 1.30pm: Advance Retail Sales expected at 0.1% from –0.6% previous.

Friday 11th April 2008 Interbank
G BRITISH POUND / US DOLLAR 1.9746

Dollar steady but still looking under pressure from the euro.

US Dollar:
The dollar took a back seat yesterday as the markets looked towards the eurozone and UK for which way interest rates were heading. The dollar was slightly lower against the euro and investors are looking for a weaker dollar against the single currency.

The dollar is seen as less attractive to investors than the euro with a lower yield on account of the Federal Reserve’s rate cuts. Traders will remain cautious ahead of this weekends G7 meeting which could touch on currencies.

Cable is trading at 1.9739 from 1.9764 in yesterdays opening session. Against the euro there is a similar story with only a 9 pips move from Thursdays open.

Data at 1.30pm: Import price Index expected at 13.6% unchanged, at 3.00pm the U.of Michigan Confidence.
 

Thursday 10th April 2008 Interbank
G BRITISH POUND / US DOLLAR 1.9764

Oil near $111.00 per barrel on back of drop in US crude inventories

US Dollar:
The dollar weakened off against the euro yesterday as it broke its holding pattern against the single currency.Even against the tumbling pound, the dollar posted losses of three quarters of a cent to fall from $1.9675 to be trading at $1.9746.

Investors raised bets that the Fed will further slash the federal funds rate from the current 2.25% in the next few months. The readjustment of rate expectations pushed investors to cover bets on a decline in the two year note, pushing the greenback down further.

Data at 1.30pm: Trade Balance expected at -$57.5B from -$58.2B previous. Initial Jobless Claims expected at 385k from 407k previous and Continuing Claims. Speakers: Bernanke at 6.00pm
 

Wednesday 9th April 2008 Interbank
G BRITISH POUND / US DOLLAR 1.9675

Dollar steady despite release of Fed minutes & comments by Greenspan.

US Dollar:
The dollar was mixed yesterday but has exhibited some weakness versus the euro and yen following the release of the latest Federal open Market Committee meeting minutes. US federal reserve policymakers expressed uncertainty in their economic activity and inflation outlooks and found it difficult to decide on the approved 75 basis point rate cut at their most recent meeting on March 18th.

The financial markets are still expecting another rate cut by the Fed and more economic challenges for the US. In an interview yesterday, former Fed chairman ‘Alan Greenspan’ said “We are in the throes of a recession”, although there's no way of knowing how protracted the downturn will be.

The dollar has traded in a tight range from yesterday against the euro, staying around the 1.57 levels, but against the pound we have seen a rally of over one and half cents from $1.99 to $1.9682.

Data at 12.00: Mortgage Applications. Fed’s Fisher and Bernanke to speak.
 

Tuesday 8th April 2008 Interbank
G BRITISH POUND / US DOLLAR 1.9778

Euro jumps against the dollar on back of Greenspan comments.

US Dollar:
The dollar has reacted badly to comments by former Federal reserve Chairman Alan Greenspan and we have seen over 1 cent drop against the euro. He said the full extent of the US housing crises won’t be known for months, suggesting the single currency stands a better chance amid less uncertain economic conditions in Europe. Greenspans comments cast a damper on dollar sentiment that had shown some improvements in the past two or three days.

One of the weeks big highlights comes today with the release of the minutes of the mid-March federal reserve interest rate meeting. The Fed cut its rates by 75 basis points to 2.5% at the meeting, in a move that many had anticipated. Market participants will look to the minutes for additional Fed insight into why the Fed was not as aggressive as many had thought likely.

Data at 3.00pm: Pending Home Sales expected at –1.0% from 0.0% previous. At 7.00pm –Fed Minutes.

Monday 7th April 2008 Interbank
G BRITISH POUND / US DOLLAR 1.9854

Dollar trades lower on back of weaker than expected nonfarm payrolls.

US Dollar:
Markets wobbled on Friday after weaker than expected jobs data that highlighted ongoing problems in the US economy. We saw the dollar decline against the majors after US payrolls dropped for the third straight month to –80k, more than the expected figure of –50k.

Unemployment surged to 5.1% pointing to fears that the US is already in a recession. We saw the dollar fall to $1.57 against the euro and cable broke through the $2.00 level, but it did pull back some of its losses before the close.

After the release of the payrolls data, speculation increased that the Federal reserve will cut interest rates by 50 basis points when it meets April 30th.

Of note this week will be the minutes of the Fed’s march meeting on Tuesday, weekly jobless claims and February trade figures on Thursday, along with March import prices and the Michigan consumer-sentiment survey on Friday.

Data at 8.00pm: Consumer Credit. Treasury's Paulson, Fed’s Yellen and Kohn

Thursday 3rd April 2008 Interbank
G BRITISH POUND / US DOLLAR 1.9851

MPC member says BoE will need cut interest rates gradually in UK

US Dollar:
The dollar was down slightly yesterday after Fed Chairman ‘Ben Bernanke’ said for the first time that a US recession is possible. His comments only served to acknowledge what investors already believed was true about the slowing economy, while pointing as well to efforts to financial crises in the US since the Great Depression” and its chief signalled lower forecasts for the US.

The greenback could of taken a much bigger fall than it did, only loosing 30 pips against the euro since yesterday’s open. Against the pound we only saw a drop of 45 pips to be trading at $1.9850.

Data due at 3.00pm: ISM Non-Manufacturing Composite expected at 48.5 from 49.3 previous.
 

Wednesday 2nd April 2008 Interbank
G BRITISH POUND / US DOLLAR 1.9805

US dollar makes three and a half cent gain against the euro.

US Dollar:
The US dollar had a very good day yesterday as we saw it gain more than 3 and a half cents against the euro. We saw the dollar rally from just under €1.58 to be trading around €1.5574 this morning. The main reason for the rally was the release of an ISM survey which showed manufacturing activity in the worlds largest economy has unexpectedly strengthened. The survey showed the ISM index rose to 48.6 in March, above last months figure of 48.3 and well above the estimated figure of a drop to 48.0.

The dollar also found support in better than expected US construction spending data which showed overall spending fell just 0.3% after a revised 1.0% decline in January.

Against the pound the dollar has gained nearly 1 cent, from $1.9850 to $1.9760. Bernanke to Testify before Joint Economic Committee at 1.30pm
Data at 1.15pm: ADP Employment Change expected at –30k from –23k previous.

Factory Orders at 3.00pm expected at 0.6% from –2.5% previous
 

Tuesday 1st April 2008 Interbank
G BRITISH POUND / US DOLLAR 1.9769

Euro weakens on back of UBS losses.

US Dollar:
The dollar has benefited from the UBS losses as the euro took a dive against the greenback. The dollar has gained over a cent against the euro since yesterday, from €1.5816 to €1.5654.

Against the pound the dollar was also up, gaining over one cent from $1.9880 to $1.9748. Where the dollar goes for the rest of the week will be defined by the up and coming economic data due, starting with ISM today and Friday’s March nonfarm payroll report.

In the second week of April, we have the first round of 1st quarter report earnings from some of the US’s biggest banks, worth keeping an eye on.

Data at 2.00pm@ ISM manufacturing expected at 47.5 from 48.3 previous.

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