Pounds Dollars Exchange rates January 2008

Pounds Dollars Currency News Archives

Thursday 31th January 2008 Interbank
G BRITISH POUND / US DOLLAR 1.9851

Fed slashes interest rates by a further 50 basis points.

US Dollar:
The Federal reserve policymakers pretty much gave financial markets what they wanted and expected. Just over a week after it cut the fed funds rate by 75 basis points, the FOMC cut the rate another 50 basis points to 3%  its lowest since Spring 2005. This combined with action taken earlier was done to promote moderate growth over time and to mitigate the risks to economic activity.

Key reports on the job market and manufacturing data to arrive on Friday could also add to investors concerns about the state of the economy, which has been dragged down by a crumbling housing market and losses to major financial institutions.

Data at 1.30pm: Personal Income expected at 0.4% (unchanged), Personal Spending expected at 0.1% from 1.1% previous, Initial Jobless Claims and Chicago Purchasing Manager at 4.45pm.

Wednesday 30th January 2008 Interbank
G BRITISH POUND / US DOLLAR 1.9904

All eyes on the Fed this evening—markets look for a 50 basis point cut.


US Dollar:
Today looks likely to be a rollercoaster ride on the dollar as we have a slate of US economic data to get through before the Fed’s decision on interest rates at 7.15pm this evening. The expectation is of a rate cut by half a percentage point from 3.5% to 3%. The rate cuts are just one part of the central banks plan to boost the economy.

The Fed auctioned $30b in funds to commercial banks on Tuesday the fourth time since last month it has provided cash strapped banks with extra reserves.

Yesterday the dollar found some strength after news of an unexpectedly large jump in Durable Goods Orders in December.

Data at 1.30pm: GDP (expec. 1.2% from 4.9%), Personal Consumption (expec 2.8% from 2.8%) & Core PCE (expec 2.5% from 2.0%). FOMC rate decision at 7.15pm expected to drop to 3% from 3.5%

Tuesday 29th January 2008 Interbank
G BRITISH POUND / US DOLLAR 1.9848

US Dec Home Sales hit lowest in 12 years.

US Dollar:
Data from the US housing market weakened the dollar yesterday as New Home Sales in December dropped by more than expected to their lowest level in 12 years. This is exceptionally poor data and the dollar tone was negative already going into the data. The report has persuaded markets to bump up the odds that the Fed may cut rates by another 50 basis points this week as it struggles to pump more life into a U.S. economy struggling with rising unemployment, a weak manufacturing sector and softer consumer spending.

Data: Durable Goods at 1.30am expected at 1.9% from –0.1% previous.

Consumer Confidence at 3.00pm expected at 87.5 from 88.6 previous.

No speakers today.
 

Monday 28th January 2008 Interbank
G BRITISH POUND / US DOLLAR 1.9807

Markets look ahead to busy week for economic data & US rate decision

US Dollar:
This week’s focus will be on what the Fed does with interest rates when it meets on Wednesday. Expectations are for a rate cut by 50 basis points to 3 per cent, which would push down the cost of borrowing in America by almost a third in just over a week.

Tomorrow we also have President Bush’s State of the Union address which is expected to shed some more details on the $150 billion fiscal stimulus package.

Other key data this week will be GDP figures and non-farm payroll figures, which is forecast to show a weakening in the manufacturing sector, heightening the risk of an imminent recession.

Data today at 3.00pm: New Home Sales expected at 649k from 647k previous. No speakers today.

Friday 25th January 2008 Interbank
G BRITISH POUND / US DOLLAR 1.9831

Oil gains $2.42 to rise to $89.41 per barrel.

US Dollar:
The Federal Reserve said yesterday it remained comfortable with its decision to cut interest rates on Tuesday despite news on Thursday that the preceding stock sell-off may have been related to a rouge trader. They did not know of the French banks unwinding of the rogue traders positions when it cut rates but it wouldn’t of affected its actions.

Yesterday we saw initial jobless claims fall, continuing a market trend for the month. This and the news of the Societe General scandal may alter the markets view that a cut of 50 basis points in the Feds meeting next week is a done deal.

No data or speakers today.
 

Thursday 24th January 2008 Interbank
G BRITISH POUND / US DOLLAR 1.9559

Possible US government brokered rescue plan for credit insurers.

US Dollar:
One of the Key questions facing Federal Reserve policy makers next week, in the wake of their surprise rate cut on Tuesday, is how much lower they should push interest rates to rescue the US economy. There is growing talk that they may follow this weeks emergency cut with a 50 - 75 basis point cut in their meeting on 30th Jan. Either move would, in combination with Tuesday’s, represent the steepest rate cut in so short a period since August 1982.

Data at 3.00pm:existing Home Sales expected at 4.95M from 5.00M previous. Speakers today US Treasury’s Paulson at 4.20pm.
 

Wednesday 23rd January 2008 Interbank
G BRITISH POUND / US DOLLAR 1.9583

Fed cut interest rates by 75 basis points in emergency inter meeting.

US Dollar:
The Fed cut its interest rates to 3.5% yesterday in an emergency inter meeting. There was always a possibility they may have moved before their meeting on Jan 30th and they held no punches with an aggressive cut by 75 basis points. One of the reasons for the move was designed to stop a downward spiral in stocks which had plummeted over the last few days. There is also a possibility of a further rate cut in their meeting at the end of the month, some analyst predicting another cut of 50 basis points. As they don’t have another meeting until March, this could be on the cards.

Data today 12.00: MBA Mortgage Applications. No speakers today

Tuesday 22nd January 2008 Interbank
G BRITISH POUND / US DOLLAR 1.9462

Dollar gains as investors run for cover amid market turmoil

US Dollar:
The dollar gained yesterday as it benefited from the global market turmoil as investors repatriated funds into the greenback. Sharpe retreats in the global equity markets kept the focus on risk aversion and helped drive the move out of higher-yielding currencies and into the Dollar. The economic stimulus measures announced by the White House last week seem to have fallen short of what was needed and seems to be a key factor weighing on equity markets. The dollar gained over 1 cents against the Pound and is trading at $1.9462 and over 1 and a half cents against the Euro, currently trading at $1.4366.

Data today 3pm: Richmond Fed Manufacturing Index. No speakers today

Monday 21st January 2008 Interbank
G BRITISH POUND / US DOLLAR 1.9495

Dollar makes small gains on Friday as investors look to greenback for
safety

US Dollar:
We saw the dollar benefit on Friday as a decline in US stock markets due to negative corporate earnings news and swirling economic worries sent investors scurrying for the sanctuary of the greenback. The dollar gained 1 cent against the Euro from $1.4641 and is now trading at $1.4540 and gained over 1.5 cents against the pound, from $1.9676 on Friday to $1.9505 this morning.

No data today as Wall Street is absent for Martin Luther King Day.

Friday 18th January 2008 Interbank
G BRITISH POUND / US DOLLAR 1.9676

Weak economic data from US brings rate cut from Fed ever closer

US Dollar:
Weak figures on housing and building permits, worst Philly Fed index since 2001 and Bernanke calling for a quick fiscal stimulus package brought the potential interest rate cut by the fed ever closer. The Philadelphia Fed index came out at –20.9, the lowest reading since October 2001, a fall from minus 1.6 in December. Analyst view this data as important because historically it has been seen as the most reliable signal for the US economy of all the regional surveys.

The Feds Chairman—Bernanke was testifying on the economic outlook yesterday and he acknowledged that the central bank was ready to take ‘substantial additional action’ to support growth.

Data at 3.00pm: Uni. Of Michigan confidence expected at 75 from 75.5 previous,

Leading Indicators expected at –0.1% from _0.4% previous. Speakers today:

Fed’s Lacker at 1.00pm

Thursday 17th January 2008 Interbank
G BRITISH POUND / US DOLLAR 1.9627

US Dollar:
The Federal Reserves handling of the US economic downturn heated up yesterday as the former Chairman Paul Vocker has gone on record saying the central bank has lost its grip. This comes on the back of criticism that current Chairman Ben Bernanke may have acted too slow on rate cuts to prevent the housing market downturn pulling the country into recession. The Fed’s beige book whose data was released yesterday found indications of a widening slowdown. The beige book, based on what business and banking contracts told the 12 Federal Reserve Banks before Jan 7th, reported that economic activity increased only modestly.

Data at 1.30am: Housing Starts expected at 1150k from 1187k and Building Permits at 1138k from 1162k Speakers today: Feds Painalto, Bernanke & Lockhart
 

Wednesday 16th January 2008 Interbank
G BRITISH POUND / US DOLLAR 1.9599

US Retail Sales fall 0.4% last month against expectations of no change

US Dollar:
Easing US Producer Price Inflation and a drop in Retail Sales in Dec saw the dollar weaken further yesterday as more pressure was put on the Fed to cut interest rates. There is now not only talk of a 75 basis point cut on January 30th or if not, calls for an inter-meeting Fed cut of 50 basis points.

The Dollar hit a record low against the Swiss franc at SFr1.095 and fell 0.5per cent against sterling. We also saw the Dollar fall to a two and half year low against the Yen as global investor confidence was dragged lower.

Data today: Consumer Price Index at 1.30pm expected at 0.2% from 0.8% previous and Fed’s Beige Book at 7.00pm. No speakers today

Tuesday 15th January 2008 Interbank
G BRITISH POUND / US DOLLAR 1.9570

Dollar decline continues as pressure from all sides sends the greenback

US Dollar:
The dollar hit a record low against the Swiss franc and declined versus the Euro as investors worried about the likelihood of more Fed rate cuts, further economic fallout from the US subprime mortgage mess and ahead of key data due out today notably the PPI figures. With the Swiss franc being the safe haven in uncertain times, this shouldn’t of been too much of a surprise.

There are rumours that the Fed may not wait till the end of the month to cut rates, an inter-meeting Fed cut is not totally out of the question.

Data today at 9.30am: Producer Price Index expected at 0.2% from 3.2% previous. Also Advanced Retail sales expected at 0.1% from 1.2% previous.

No speakers today

Monday 14th January 2008 Interbank
G BRITISH POUND / US DOLLAR 1.9641

US fears that the financial sectors troubles with bad credit will last a while through 1st half 2008

US Dollar:
The credit crunch is feared to last a while as consumers are buckling under the weight of a slowing economy. The week the government will release its monthly readings on retail sales, producer prices, consumer prices and home construction. Also the Fed will come out with its beige book on economic conditions. The market believes this weeks data, in sum, will point to a weakening economy but also moderating inflation—a formula for more rate cuts.

No data today. No Speakers today.
 

Friday 11th January 2008 Interbank
G BRITISH POUND / US DOLLAR 1.9528

Bernanke hints the Fed is ready to cut rates aggressively

US Dollar:
The Federal Chairman Bernanke’s speech yesterday weakened the dollar as he highlighted the deteriorating economic climate, focusing on the labour and housing markets. He stated ‘The committee.. Prepared to act in a timely and decisive manner, in particular, to counter any adverse dynamics that might threaten economic financial stability. The markets have taken this as a signal that a 50 basis point reduction in interest rates are on their way this month.

The dollar dropped 1 percent against the Euro yesterday.

Data: Trade balance at 1.30pm expected at -$59.4B from -$57.8B. Fed’s Mishkin & Rosengren to speak.
 

Thursday 10th January 2008 Interbank
G BRITISH POUND / US DOLLAR 1.9573

Dollar still under pressure as the speculation rises of 50 point rate cut

US Dollar:
The US dollar continued to be under pressure as talk of a US recession keeps investors nervous. The Fed’s William Poole said yesterday that ‘it was too early to tell’ if the US was slipping into recession, but he added that stable inflation expectations meant the US central bank had the scope to make large rate cuts.

No data out today

Fed speakers today will be Hoenig and Bernanke at 6.00pm
 

Wednesday 9th January 2008 Interbank
G BRITISH POUND / US DOLLAR 1.9682

Dollar still under pressure as the speculation rises of 50 point rate cut

US Dollar:
Eight of the chief economists at the 20 primary dealerships are now calling for a 50 basis point cut by the Fed on January 30th. This number seems to have swelled after Fridays non-farm payroll report. The December employment report and ISM manufacturing index which was weak as well has led to Barclays Capital and Cantor Fitzgerald to upgrade their call from 25 basis point rise to 50 basis point rise.

No data today but the Fed’s William Poole speaks on US economy at 2.30pm
 

Tuesday 8th January 2008 Interbank
G BRITISH POUND / US DOLLAR 1.9819

Dollar gained back some of its losses yesterday, but weak again this morning

US Dollar:
The dollar gained back some of its losses yesterday as it hit a four and a half month high against sterling at $1.9654. This seems to be on the back of US fund buying and also caution ahead of key speeches this week by the fed, mainly Bernanke on Thursday, which may give an insight as to what will happen with their key rate decision at the end of the month. This morning the dollar has started to give back some of those gains already.

Future markets were yesterday showing a 62% chance of a 50 basis point cut this month.

Data today will be Pending Home Sales due at 3.00pm expected –0.5% from previous 0.6%
 

Monday 7th January 2008 Interbank
G BRITISH POUND / US DOLLAR 1.9680

Jitters grip markets as weaker than expected US employment report

US Dollar:
The markets were slightly spooked as the US employment report came in weaker than expected. This pushed unemployment up to a 2 year high. The dollar was also hurt by the weak Non-farm payroll figures released on Friday. In the Times this morning, Goldman Sachs are calling for a 50 basis point cut by the end of this month.

A quiet day for figures in the US today, with the Fed’s Lockhart due to speak at 5.40pm
 

Friday 4th January 2008 Interbank
G BRITISH POUND / US DOLLAR 1.9711

Dollar hits month low against Euro

US Dollar:
The dollar hit a month low against the Euro yesterday with continued expectations of lower interest rates.

Slowing factory order activity, weakening job growth and a credit crunch have all been a factor. But this weeks surge in oil and gold underlines why the Fed may not have the freedom to ease monetary policy as much as it did in 2001. If the fed makes more rate cuts and the economy bounces back quickly, spurring inflation, it could take tight monetary policy, even a recession, to tame prices.

Due today is Non-farm payrolls expected at 70k from 94k previous month & unemployment rate expected at 4.8% from 4.7% previous month.

Feds Kohn & Madigan to speak later this evening

Thusday 3rd January 2008 Interbank
G BRITISH POUND / US DOLLAR 1.9794

ISM falls to lowest levels since 2003
Dollar weakens further with further rate decreases on the way

US Dollar:
The minutes released yesterday reveals that the scale of the housing slump across the US and the speed at which the American economy has slowed has caught the Fed off guard. They have indicated that a sharper reduction of rates was more likely. This coupled with the worst figures for the ISM data since April 2003 heaped more pressure on the dollar as it slumped to $1.4750 against the Euro.Figures out today will be the ADP Employment change at 1.15pm UK time and Factory Orders due at 3.00pm.

There are no speakers today
 

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