Pounds Dollars Exchange rates February 2008

Pounds Dollars Currency News Archives

Friday 29th February 2008 Interbank
G BRITISH POUND / US DOLLAR 1.9901

Dollar plummets to record lows.


US Dollar:
The dollar plummeted to record lows and shares tumbled yesterday after Ben Bernanke, the Fed Chairman, spooked markets with a prediction of US bank failures and fresh warnings over a grim outlook for America’s economy.

In its third day of heavy losses, the embattled dollar slumped across the board on foreign exchanges after Mr Bernanke gave what economist said was a “green light” to markets to step up their assault on the US dollar. The Fed Chairman did offer some positive comments , that most banks will bounce back from their mortgage troubles, that inflation should ease and that the US is nowhere near the stagflation scenario of the 1970’s.

At present it doesn’t seem that those comments will be enough to halt the dollars slide. The dollar lost over 1 per cent against the Euro as it hit $1.5231, against the pound the dollar fell half a percent to hit $1.99.

Data at 2.45pm: Chicago Purchasing Manager expected at 49.7 from 51.5 previous. Speakers: Fed’s Mishkin at 4.00pm, Lockhart at 5.15pm and Evans & Poole at 6.30pm.

Thursday 28th February 2008 Interbank
G BRITISH POUND / US DOLLAR 1.9792

Dollar slumps —Bernanke reveals more interest rates cuts on way.

US Dollar:
The dollar continued it’s one way path yesterday as the greenback broke through record lows against the euro. The Fed’s Chairman ‘Ben Bernanke’ reported on Monterey Policy yesterday and indicated the Fed is more concerned about the sagging economy than the immediate risk of inflation. He named housing, labour and credit markets as risks to economic growth, outstripping inflation concerns. That suggests policy makers remain on track to ease interest rates again next month.

The dollar dropped to as low as $1.5143 before falling back to the $1.51 level. The dollar was also within touching distance of the $2 mark against sterling.

Durable goods also fell last month confounding the dollars woes.

Ben Bernanke continues his testimony before the Senate Panel

Wednesday 27th February 2008 Interbank
G BRITISH POUND / US DOLLAR 1.9941

Dollar falls—full fledged attack on the greenback.

US Dollar:
The dollar tumbled to a record low against the euro yesterday as continued concerns about the US economy led to a full-fledged attack on the greenback. Remarks by Fed Vice Chairman Donald Kohn hinted at the need for further interest-rate cuts to head off a recession, sent the euro on the last leg of its advance into record territory.

The dollar may fall even further, beyond $1.5050, especially if Fed Chairman Ben Bernanke reiterates gloomy economic growth in the near term, and suggests even more rate cuts on Wednesday and Thursday during his semi-annual testimony to the Congress. So, rate cuts on the way for next month, but as we have seen before, they may come sooner than expected.

Data at 1.30pm: Durable Goods expected at –0.4% from 5.2% previous, at 3.00pm New Home Sales expected at –0.7% from –4.7% previous.

Fed’s Bernanke to speak at 3.00pm and release of report on economy.
 

Tuesday 26th February 2008 Interbank
G BRITISH POUND / US DOLLAR 1.9662

US Existing Home Sales fall for sixth straight month in January.

US Dollar:
The dollar was more or less unchanged against the euro as the single currency failed to push through key levels against the greenback, after a week of dollar weakness. The trouble the dollar is having at present is the markets feel they already know the hand which will soon be dealt, with regards to interest rates movements.

In January we saw dollar strength as the Fed slashed interest rates to boost the economy. Now it seems the markets know more rate cuts are on their way, and this is seen as a negative for the greenback to weaken the dollar, unlike the ECB who seem to be playing a much more cautious game.

Data at 1.30pm: PPI expected at 7.5% from 6.3% previous.

At 2.00pm we have S&P/CaseShiller Home Price Index and tat 3.00pm we have Consumer Confidence and House Price Index.

Fed’s Kohn to speak at 5.15pm
 

Monday 25th February 2008 Interbank
G BRITISH POUND / US DOLLAR 1.9665

Dollar under pressure as market fears about US economy continue.

US Dollar:
The dollar finished off the week on a downward curve after making gains over the last few weeks. The greenback lost over 2 cents against the pound and just under 2 cents against the single currency. The markets are still very worried about how weak the US economy is and are wondering if the aggressive rate cuts by the Fed have come too late.
Data at 3.00pm: existing Home Sales expected at 4.81M from 4.89M previous. Fed’s Mishkin to speak at 8.30pm.
 

Friday 22nd February 2008 Interbank
G BRITISH POUND / US DOLLAR 1.9665

Philly Fed knocks the dollar off it’s perch

US Dollar:
The dollar was battered out of the park yesterday as the Philadelphia Fed data was released showing activity in the regions manufacturing sector continued to weaken. Another piece of bad news was the Confidence Boards January index of leading economic indicators, which posted its fourth straight drop.

The dollar lost one per cent against sterling, breaking through the key $1.95 level, falling from $1.9455 to $1.9642, and against the single currency, the dollar fell 0.6% to break through the key $1.48 level.

It seems although investors had been assured by the central bank that it will lower rates again if necessary, that expectation has failed to galvanise their confidence in the stock market and economy. Wall Street seems to remain concerned that the economy could be so weak that rate cuts which take months to work their way through the economy will fail to prevent further deterioration.

A quote by Brian Gendreau, investment strategist for ING Investment Management said “The Fed cutting rates is a little bit like a fire engine pulling up to your house, you’re happy help has arrived, but still, your house is burning down”

No data today. Fed’s Fisher to speak at 6.30pm

Thursday 21st February 2008 Interbank
G BRITISH POUND / US DOLLAR 1.9455

US Fed minutes talk of aggressive rate movements in both directions!

US Dollar:
The minutes from the last Fed policy meeting revealed that there was still downside risk to the economy even in the wake of a massive reduction in interest rates. What was very interesting was the revelation that some officials said a “rapid reversal” of recent policy easing might be needed once the economy stabilises. That suggests that the Fed’s aggressive stance on interest rate movements will be two sided, both when rates are falling and when they eventually rise.

CPI data rose last month which will make the Fed think about inflation worries, but it doesn’t look like it will be enough to halt their aggressive stance of rate cuts as yet.

Home construction in January also rose but only slightly. The dollar had a slight rally against the pound but fell back to where it had been before the release of the data.

Against the euro it is still range bound between $1.4710—$1.4750.

Data at 3.00pm: Philly Fed expected at –10 from –20.9 previous, Leading Indicators expec –0.1% from –0.2%.
 

Wednesday 20th February 2008 Interbank
G BRITISH POUND / US DOLLAR 1.9469

Oil closes over $100 per barrel for the first time overnight.

US Dollar:
The US dollar seems to be stuck in narrow ranges against the euro, with the spread seen between $1.4700 to $1.4750. Against the pound we are seeing a move below $1.9500 as a key level and the sentiment seems to be for a strong dollar against sterling.

Yesterday we had the National Association of Home Builders Index figures and they showed US home builders gained a little more confidence in the market during February, but the mood was subdued as they watched sales plunge. The figure expected was 19 but the markets saw a figure of 20. This was obviously way below this time last years level of 39.

Data at 1.30pm: CPI expected at 0.3% from no change, Housing starts, Building Permits and Minutes from Federal Open Market Committee Meeting.

Oil has dropped off slightly this morning after closing above $100 a barrel for the first time overnight as investors seized on a refinery explosion and the possibility that OPEC may cut its output. Current price is $97.73.
 

Tuesday 19th February 2008 Interbank
G BRITISH POUND / US DOLLAR 1.9525

National holiday in US makes quiet day for the US dollar.

US Dollar:
The US market was closed yesterday due to presidents day so it was pretty quiet on the data front. As the eurozone and UK markets opened, the dollar started fairly positively but the greenback soon started to decline against the single currency and has dropped from an opening of 1.4656 to 1.4735. The dollar did gain against sterling, but this was only on the back of a weakening pound.

Data at 6.00pm: NAHB Housing Market Index and at 10.00pm -ABC Consumer Confidence. Fed’s Stern speaks at 2.00pm
 

Monday 18th February 2008 Interbank
G BRITISH POUND / US DOLLAR 1.9510

Dollar holds firm and shakes off weak data from Friday.

US Dollar:
On Friday, despite weak US data and lower stock markets, the dollar weakened only slightly against its rivals. This is suggesting currency investors are starting to look beyond the constant stream of bad news on the economy.

It is a US holiday stateside today so the markets are expecting tight ranges against the euro, between €1.4650 - 1.48. Against the pound, the dollar has already made significant moves as it try's to break through the $1.95 level.

Data: Markets closed due to US holiday—Presidents Day.
 

Friday 15th February 2008 Interbank
G BRITISH POUND / US DOLLAR 1.9675

Dollar declines on back of Bernanke’s comments.

US Dollar:
The greenback declined yesterday on the back of a grim short-term outlook from Federal reserve Chairman Ben Bernanke. His prediction that the economy would be “sluggish” until later in the year and with more mortgage related losses at banks weighed heavily on the dollar. Bernanke’s comments were more bearish than before and have put a dampener on the better than expected report on January Retail Sales figures earlier in the month.

 The dollar dropped to $1.9730 against the pound last night, before dropping back to the $1.97 level. Against the single currency, the dollar dropped 0.3% and settled at 1.4650.

Data at 1.30pm: Empire Manufacturing expected at 7.3 from 9.0 previous, net Long-Term TIC Flows expected at $76.0B from $90.9B previous. U.Of Michigan Confidence at 3.00pm.

Feds Mishkin to speak at 6.15pm.
 

Thursday 14th February 2008 Interbank
G BRITISH POUND / US DOLLAR 1.9701

Retail Sales unexpectedly climb in US

US Dollar:
US Consumer Spending data beat expectations and pushed the dollar to a one-month high against the yen, and had a slight rally against the euro, but then gave up its gains against the single currency by the close.

It seems it is not all doom and gloom for the dollar, as January’s retail sales numbers suggest US consumers remain more than willing to spend money if they have it, and that is encouraging for the outcome of the fiscal stimulus package coming this summer. The dollar has started to give back some of its gains against the pound as sterling was buoyed on the back of comments made by the BoE governor.

The greenback has already touched the 1.97 level this morning.
Data at 1.30pm: Trade Balance expected at -$61.1B from -$63.1B previous, 10.00am—Initial Jobless Claims expected at 343k from 356k previous. Speakers: Bernanke, Paulson, Cox at 3.00pm and Evan’s at 6.30pm.

Wednesday 13th February 2008 Interbank
G BRITISH POUND / US DOLLAR 1.9635

Oil up slightly at $93.17 per barrel—Venezuelan dispute grows.

US Dollar:
The dollar gained slightly against the yen yesterday, as investors welcomed the news that billionaire investor Warren Buffett’s offer to reinsure municipal bonds. The correlation between equity prices and dollar movements, especially the yen has been very high lately.

Against the euro, the dollar fell slightly after the Fed’s Yellen said that the US economy still faces a ‘significant threat’ and added that its too early to start talking about removing the Fed’s accommodative stance on interest rates.

Data at 1.30pm: Advance Retail sales expected at –0.2% from –0.4% previous.

Oil prices remained high yesterday, as Venezuela said it had stopped selling crude to the worlds biggest oil company. The reason seems to be Venezuela’s response after US owned Exxon Mobil’s court bid to freeze billions of dollars in Venezuelan assets.
 

Monday 11th February 2008 Interbank
G BRITISH POUND / US DOLLAR 1.9415

US Dollar:
The US dollar had one of its best weeks against the euro in months last week, but it may consolidate those gains this week, after the Group of Seven leading industrial nations provided little new guidance on exchange rates. The dollar may retreat some this week, if US data comes in weak and refuels fears of a recession.

No data today. Feds Poole to speak at 11.00pm
 

Thursday 7th February 2008 Interbank
G BRITISH POUND / US DOLLAR 1.9536

US Dollar:
The dollar continued to post gains against the pound and euro yesterday, shaking off the fall out from 125 basis point cut by the Fed last month. One big issue which will not go away in the US, is the worry regarding the impending implosion of bond insurers on the US economy. It is felt that Wall Street will be able to solve only some of the bond insurers problems, but not all. American bond insurers, which guarantee the interest and principle payments on the securities that they underwrite in the event of a default, face a surge in claims on sub-prime mortgage bonds as defaults rise on the underlying home loans. If they are unable to meet these claims, the value of bonds they underwrite would fall, prompting another round of multibillion-dollar write downs of Wall streets biggest banks.

Data: 10.00am Pending House Sales expected at –0.1%, 1.30pm - ICSC Sales & 8.00pm - Consumer Credit
 

Wednesday 6th February 2008 Interbank
G BRITISH POUND / US DOLLAR 1.9550

US ISM Non-Manufacturing data has biggest monthly fall since 2001.

US Dollar:
The dollar remained resilient yesterday after another round of poor economic data. The ISM indicator fell from 54.4 to 41.9, its lowest level since October 2001, breaking through a key the key 50 level. This data, on the back of poor data on Friday may of weakened the dollar, but it has found support, with Oil and gold the biggest losers.

The dollar was also helped by poor economic data out of the eurozone. It looks like traders were also forced to abandon bets against the dollar, after shaking off the poor data last Friday.

US interest rate futures have now moved to price in another 50 basis point cut in rates when the fed next meets on March 18th.

Speakers today: Feds Plosser at 6.40pm

Tuesday 5th February 2008 Interbank
G BRITISH POUND / US DOLLAR 1.9716

Yen weakens - riskier carry trades are buoyed by stock market rally.

US Dollar:
On Monday the dollar remained weak compared to the euro and sterling, but up against the yen after currency investors switched funds from safer, lower yielding currencies back into those that pay higher returns. Risk appetite usually comes back into play after a rally in the stock markets.

The threat of recession has prompted a fiscal stimulus package and multiple interest rate cuts but a major aspect of the problem may have been missed. At least half of the lending in the market up until the crises consisted of structured credit which has now slowed to a trickle. This was providing crucial funding to the economy but has simply shut down.

Data at 3.00pm: ISM Non-Manufacturing expected at 53 from 53.9 previous. Feds Lacker to speak at 5.15pm
 

Monday 4th February 2008 Interbank
G BRITISH POUND / US DOLLAR 1.9738

US Dollar:
Unemployment unexpectedly tumbled last month for the first time in more than four years after Nonfarm Payrolls
numbers came out weaker than predicted. But it wasn't all doom and gloom as the poor figures seem to
have been off-set by a slight drop in unemployment, and a sharp upward revision to December payroll
growth. The dollar found some support after digesting the data and a small rise in stock markets. We saw a 2
cent gain against the pound late on Friday and a half a cent gain against the Euro. Dollar liquidity also
seemed to improve on Friday, helping the dollar with its gains.
Data due at 3.00pm: Factory Orders expected at 2.4% from 1.5% previous

Friday 1st February 2008 Interbank
G BRITISH POUND / US DOLLAR 1.9921

.
Markets await key US Nonfarm Payrolls data.

US Dollar:
After cutting interest rates by 125 basis points, the dollar is being favoured as a carry trade currency alongside the yen and Swiss franc.

Today the market will be keeping alert for the key Nonfarm Payrolls and Unemployment data which is due at 1.30pm. Nonfarm payrolls are expected to be around 75k, a marked improvement from December when they came in at 18k. If the data comes in weaker than expected, it will only strengthen the view that the American economy is heading into a recession.

Data at 1.30pm: Nonfarm Payrolls expected at 75k from 18k previous. Unemployment Rate expected at 5.0% unchanged from previous.

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