Pounds Dollars Exchange rates June 2008

Monday 30th June 2008 Interbank
G BRITISH POUND / US DOLLAR 1.9952

Oil rises to hit over $141 a barrel—tensions between Israel and Iran rise.

US Dollar:
The dollar is continuing to see pressure from all side this morning as GB Pounds-US Dollar heads towards the $2.00 level. The greenback hit a three week low against the euro, which was part due to oil prices surging last week to a record high, and economic data showed US consumer sentiment hot a 28 year low and Wall Street stocks extended their slide. Investors are waiting to see whether this weeks key events provide clues about the dollars direction.

ECM holds its rate decision and the US posts its jobs data on Thursday.

Data 2.45pm: Chicago Purchasing Manager expected at 48.4 from 49.1 previous.
 

Friday 27th June 2008 Interbank
G BRITISH POUND / US DOLLAR 1.9844

Dollar comes under more pressure from majors on interest rate concerns.

US Dollar:
The dollar endured another day of broad declines on interest rate concerns, slumping US stocks and rising oil prices. The greenback came under pressure from both the euro and pound, losing over 1 cent on the single currency and one and a half cents on sterling. Cable is closing in on the $1.99 level, with investors eyeing the physiological $2 barrier. Dollar/euro is also looking like it may test a key level at $1.60. Unless the Fed corrects the markets perception that it is on hold for the foreseeable future with interest rates, the euro is poised to break above the $1.60 barrier in search of fresh record highs in coming weeks, according to Michael Woolfolk, senior currency strategist at Bank of New York Mellon.

Data 1.30pm: Personal Income expected at 0.4% from 0.2% previous

Thursday 26th June 2008 Interbank
G BRITISH POUND / US DOLLAR 1.9734

Fed leaves interest rates unchanged at 2%.

US Dollar:
The Fed left interest rates on hold yesterday at 2%, which was as expected. In the month running up to the decision, there were was an outside chance that the Fed may have even raised interest rates by 25 basis points which had buoyed the dollar, but as we got closer to the meeting, that view more or less diminished.
As a result of the hold on rates, the dollar has dropped down against the majors, except for the yen. We saw over a cent drop against sterling and a cent drop against the single currency.

The Federal Reserve’s press statement didn't really give the markets a strong signal that it would raise interest rates later in the year. The Fed statement pointed to a few positive signs in the US economy, but it also said persistently rising energy prices are likely to limit growth.

Data 1.30pm: Existing Home Sales expected 1.2% from –0.1% previous.

Wednesday 25th June 2008 Interbank
G BRITISH POUND / US DOLLAR 1.9663

US confidence hits 16 year low.

US Dollar:
The FX markets were very subdued yesterday as investors look towards the Fed’s interest rate meeting later today. They are looking to see what guidance the US Federal Reserve will give in its monetary announcement due at 7.15pm and for a less hawkish tone. The dollar was little changed yesterday considering the poor economic data which the greenback had to endure.

Consumer confidence fell yet again in June to a 16 year low with expectations hitting an all-time low. The figure released was 50.4 for the month of June, from an expected figure of 56.7. The housing market data was not much better as US home prices fell to December 2005 levels during April. A fall of 4.6% in April was posted from an expected fall of 0.5%.

Data 1.30pm: Durable Goods orders expected at 0.0% from –0.5% previous, 2.00pm: New Home Sales expected at –2.7% from 3.3% previous, 7.15pm: Federal Open Market Committee Rate Decision expected at 2.00% unchanged.

Tuesday 24th June 2008 Interbank
G BRITISH POUND / US DOLLAR 1.9683

FOMC week sees little movement in major currencies.

US Dollar:
As we are in FOMC week, there is little movement in the majors as the markets look ahead to tomorrows Fed interest rate decision. The greenback was slightly up against the euro yesterday, buoyed by data showing economic weakness spreading to the eurozone and Japan.

Alongside the interest rate decision due tomorrow, there is a series of economic reports due later in the week. While investors largely expect the Federal Reserve to keep benchmark interest rates steady at 2% when policymakers meet Tuesday and Wednesday, speculation remains over how the US central bank will characterize risks to inflation and economic growth.

Data 3.00pm: House Price Index expected at –0.5% from –0.4% previous, Consumer Confidence expected at 56.7 from 57.2 previous.
 

Friday 20th June 2008 Interbank
G BRITISH POUND / US DOLLAR 1.9781

US Jobless Claims falls slightly.

US Dollar:
The dollar initially edged higher against the euro and yen yesterday as crude oil prices declined and US stocks strengthened, but has lost those gains going into Fridays morning session. The big move on the dollar was seen against sterling as the greenback lost one and a half cents on the pound. Better than expected economic data in the UK pushed the dollar to a one and a half week low against sterling.

The economic data out of the US was mixed as initially we saw a drop in US Jobless Claims, erasing only a small fraction of the previous weeks surprisingly large spike. The Philly Fed data was not so kind on the greenback as it showed Mid-Atlantic area manufacturing contracted again in June, with the index dropping to –17.1 from an expected –11.4.
No data today.

Thursday 19th June 2008 Interbank
G BRITISH POUND / US DOLLAR 1.9624

Sentiment seems to be turning negative towards the US dollar.

US Dollar:
The dollar was down against the Euro & Yen yesterday, but stuck to narrow ranges due to a lack of major data releases. However, today could change the buck’s three day pattern, when the latest weekly employment data and the Philly index for June are released. Pressure on the dollar is also being confounded by a creeping pessimism from the financial sector, weighing on the greenback.

A report by Goldman Sachs is predicting that banks credit losses will accelerate into the third quarter and not peak until the first quarter of next year. These concerns are further diminishing expectations for a rate hike by the Fed next week.

Data at 1.30pm: Initial jobless claims expected at 375k from 384k, Philly Fed expected at –11.4 from –15.6.

Wednesday 18th June 2008 Interbank
G BRITISH POUND / US DOLLAR 1.9537

US dollar digests mixed bag of economic data.

US Dollar:
The dollar lost around a cent against the euro yesterday but has made up part of those losses today. Against the pound the dollar faired better as the greenback surged from $1.97 to hit $1.95, after economic data was released both in the US and UK.

The US producer price index rose 1.4% in May, the biggest rise since November. But other economic data weighed heavily on the dollar as its decline was fuelled by the release of poor housing starts and industrial output. On Tuesday the dollar declined against the euro and yen as expectations started to fade for an imminent hike in US interest rates. Investors have now slashed the odds of a rate hike at the next FOMC meeting set for next week, and also significantly reduced the likelihood of a tightening at the August 5th meeting.

Data at 12.00: MBA Mortgage Applications. Speakers: Feds Yellen at 4.45pm.

Tuesday 17th June 2008 Interbank
G BRITISH POUND / US DOLLAR 1.9511

US Dollar slips down as sentiment on interest rate rise eases

US Dollar:
On Monday the dollar reversed direction from its rally last week after finance ministers from leading industrial nations failed to address the greenbacks recent exchange rate weakness in a weekend meeting. The dollar lost nearly 2 cents against the pound yesterday to hit a low of $1.9688, currently trading at $1.9668.

Against the euro there was a similar loss as the euro gained to trade at $1.5517, now trading at $1.5501. The Fed’s inflation-fighting mantra was still making the rounds yesterday, thanks to Richmond Fed president Jeffrey Lacker. “As we move through this period of low growth, we need to be attuned to the risk that we emerge from the slowdown with inflation following a higher trend than when we went in”. While the Fed’s policy statement following its meeting next Tuesday and Wednesday is likely to use stronger language about the risks from inflation than in May, it is unlikely to go so far as to ratify market expectations of a rake hike as soon as August, the Wall Street Journal said.

Data at 1.30pm: Current Account Balance, Housing Starts, Building Permits, PPI. At 2.15pm: Industrial Production.

Monday 16th June 2008 Interbank
G BRITISH POUND / US DOLLAR 1.9511

Yen continues its decline as it falls through Y108 against the dollar.

US Dollar:
On Friday the dollar surged to a 1 month high against the euro, helped by the Irish voters rejecting a reform plan in the running of the EU. But the dollar gave back some of its gains during the American trading session when a report showed US consumer confidence was at a nearly three-decade low, which reminded investors about the struggling US economy.

The US consumer prices rose sharply last month on soaring energy prices and a big jump in airline fares. The CPI increased 0.6% in May from an expected rise of only 0.5%. Looking at cable, trading was in a narrow range trading around the $1.9476 level, with little movement through to today, currently trading at $1.9506.

Looking forward for this week, as well as key investment bank earnings which will be interesting, investors will be watching oil prices and economic data from the US for direction.

The National Association of Home Builders releases its index of June activity; the Labor Department reports on producer prices; the Consumer Department reports on new home construction; the Conference Board reports on May’s leading indicators and the Philadelphia Fed releases its regional index of manufacturing activity.

Data at 2.00pm: Net Long-term tic flows and Empire manufacturing. Speakers: Fed’s Bernanke & Lacker.

Friday 13th June 2008 Interbank
G BRITISH POUND / US DOLLAR 1.9448

US dollar remains strong after better than expected retail sales data.

US Dollar:
The dollar remained higher across the board yesterday as the market continues speculation about US interest rate hikes, worries about the threat of market intervention and better than expected retail sales data.

The greenback gained over a cent against the euro from $1.5562 to trade at $1.5417 this morning. Against the pound there was also a significant gain as one and a half cent was gained, seeing cable go from $1.9638 to below $1.95, currently trading at $1.9484.

Data released yesterday showed US retail sales surged in May, rising double the rate expected in a sign consumers were using payments and that the economy might not be as weak as feared. Retail sales increased by 1.0% after economists had only expected a rise of 0.5%.

US import prices also rose for a third straight month in May, suggesting rising oil prices and a weak dollar are fanning inflationary pressures. The data will be unwelcome news at the Federal Reserve, especially in light of recent comments by Fed Chairman Ben Bernanke suggesting officials are increasingly worried about the weak US dollars affect on US inflation.

Data at 1.30pm: Consumer Price Index YoY expected at 3.9% unchanged. U.of Michigan Confidence expected at 59.5 from 59.8 previous.

Thursday 12th June 2008 Interbank
G BRITISH POUND / US DOLLAR 1.9513

Rumours of USD intervention ahead of the G7 this weekend.

US Dollar:
On Wednesday, the dollar declined against the euro and yen, reversing much of its gains over the previous two days, as oil prices rose to near-record levels in reaction to a sharp drop in U.S. crude inventories. This prompted investors to buy Euros and yen and sell dollars, as commodities are priced in greenbacks.

This morning rumours of central bank intervention to prop up the dollar have surfaced and have pushed the dollar higher in early London trading.

US retail sales are expected to be higher month on month which has further bolstered USD buying this morning. Expect some extreme volatility around 1330 today as that figured is released.

Data at 1330 US Retail sales MoM
1630 Bernanke speaks in Kansas City
 

Wednesday 11th June 2008 Interbank
G BRITISH POUND / US DOLLAR 1.9604

US Dollar strength holds as markets digest the possibility of higher rates.

US Dollar:
The market clearly believes that Bernanke’s comments the other day regarding the threat of inflation have signalled a shift in Monetary policy. Indeed, the US overnight swap index are pricing in at least three 0.25% hikes from the Fed by the end of the year. The US Dollar has subsequently rallied over 4 cents against the Euro and continues to test the 1.94 level with Sterling.

Several analysts feel the move has been overdone and the recent strength could give way to renewed weakness:" Speculation about future Federal Reserve rate hikes may be a little overdone, so that the dollar's firmness on such factors may not last long," said Tohru Sasaki, chief foreign exchange strategist at JPMorgan Chase Bank.

Data at 6:00 pm Fed’s Beige Book

Tuesday 10th June 2008 Interbank
G BRITISH POUND / US DOLLAR 1.9607

Hawkish remarks by Fed Chairman sparks rate hike speculation.

US Dollar:
Monday was definitely a day for the dollar as we saw the greenback regain its losses made from Friday. There has been a two and a half cent gain on the euro to trade at $1.5565 this morning, and on cable there was nearly a full cent gain, to trade at $1.9644 this morning. The reasons for the dollar rally were remarks by Federal reserve Chairman Ben Bernanke as he sparked speculation of a rate hike in the US later this year, driving the dollar upward to a three month high against the yen in Asia this morning.

US Treasury Secretary Henry Paulson added he wouldn’t rule out the possibility of intervention in the foreign exchange market. Federal Reserve Bank of New York President Timothy Geithner said the US central bank is paying “very close attention” to the dollars performance. It seems the rhetoric is getting more direct and even President George Bush is talking up the dollar. He said “long term strength of the US economy would be reflected in the currency.
He went even further by telling the Times Newspaper in an interview that “we want the dollar to strengthen. Data at 1.30pm: Trade Balance expected at -$59.6B from -$58.2B.
 

US unemployment data shows sharpest rise since 1975.

US Dollar:
The dollar finished the week off on the back foot on Friday, with weaker than expected unemployment data hurting the greenback. Cable lost 2 cents as we saw GBP/USD drop from $1.9539 to $1.9735 and against the euro there was a similar fall of just over 2 cents, from $1.5569 to $1.5771, currently trading over the $1.58 level.

The US jobs data showed the sharpest rise in unemployment since 1975, suggesting US consumers already facing a housing slump and soaring gasoline prices now confront growing pressure from a weakening jobs market. What's spooking the market is that the unemployment rate went up much more than expected as normally the rate goes up gradually. It’s negated the good news seen on the nonfarm data which came in at –49k with the market expecting a worse figure of –52k.

There are some key US economic data reports due this week that could provide some much needed relief to the dollar. These are led by May retail sales Thursday and a consumer price inflation report on Friday.
No data. Speakers: Fed’s Geithner & Rosengren.

Friday 6th June 2008 Interbank
G BRITISH POUND / US DOLLAR 1.9560

Oil rebounds more than $5 to $128.10 per barrel as dollar tumbles.

US Dollar:
The dollar fell against the euro yesterday as comments by ECB President rallied the single currency against the greenback. The dollar fell 0.8% from $1.54 to trade at $1.5526 this morning.

Against the pound we also saw a loss as the greenback lost half a cent to trade at $1.9564. There was however some comforting news about the US economy in that better than expected retail sales and a drop in the number of laid off workers seeking unemployment benefits. It looks like the US is not in recession, but in tepid growth. Investors will look for further signs about the well being of the economy, and the markets will focus on the key nonfarm payroll figures out later today.

Chief market strategist at Wachovia Securities, Alfred Goldman said, “After anybody has surgery you don’t jump off the operating table and do the jitterbug. They keep on the operating table,” he said alluding to a possibly gradual recovery in the market from concerns about bad credit and woes in the housing industry.

Data at 1.30pm: Unemployment rate expected at 5.1% from 5.00% previous. Nonfarm Payrolls expected at -52k from –20k previous. At 8.00pm: Consumer Credit expected at $7.3B from $15.3B.

Thursday 5th June 2008 Interbank
G BRITISH POUND / US DOLLAR 1.9507

Dollar holds gains as Bernanke reinforces inflationary risks.

US Dollar:
On Wednesday the dollar maintained its stride above the euro, pound and yen, propped up by statements from Federal Reserve Chairman Ben Bernanke that reinforced those he made a day earlier, when he emphasised inflationary risks and the threat that a weaker dollar would increase those risks.

The Fed central bank is now basically endorsing a stronger greenback. Traders say that if the euro/dollar falls further it could give the dollar/yen the necessary boost to rise above Y106, and if euro/dollar touches $1.53, this would likely trigger stops. Cable has gained half a cent and has already been under $1.95 this morning, although it has handed back some of those earlier gains.

ISM data released yesterday showed manufacturing sector grew more slowly in May. The expected figure was 51.1 but the figure came in at 51.7.
Data at 6.30pm: ICSC Chain Store Sales. Speakers: Philly Fed’s Plosser at 5.00pm.

Wednesday 4th June 2008 Interbank
G BRITISH POUND / US DOLLAR 1.9559

Fed Chairman Ben Bernanke’s comments boost US Dollar.

The dollar is sharply higher against the euro, pound and yen after Federal Reserve Chairman Ben Bernanke offered potent words on the central bank’s commitment to a strong US currency. His speech is a clear suggestion that the Fed has shifted from viewing dollar weakness as helpful for growth to a point where the negatives associated with inflation have become more important.

However, later, the dollar lost some of its gains as US stocks fell on banking sector fears with shares in Lehman Brothers down to levels not seen since the depths of the credit crises. Comments from Ben Bernanke seemed to reiterate expectations the economy will rebound during the second half due to interest rate cuts, Fed loans to banks and tax rebates. But the chairman also said the economy faces headwinds from rising prices for food and energy a signal that interest rates will remain on hold.

Data at 3.00pm: ISM Non-manufacturing Composite expected at 51 from 52 previous.

Tuesday 3rd June 2008 Interbank
G BRITISH POUND / US DOLLAR 1.9637

Dollar finds some support after ease in oil prices.

The dollar remains slightly down from yesterday amid concerns about the mixture of slow growth and inflation in the US economy. Last Friday showed that US consumer confidence had continued to decline but that the core PCE deflector inflation measure had risen more than anticipated. This is ensuring that the market is even more focused on the key US data due this week with nonfarm payrolls this Friday.

US construction spending data released yesterday showed a drop during April, brought lower by a decrease in public sector outlays and the steady decline of the housing market.

Total spending fell by 0.4% to a seasonally adjusted annual rate of $1.121 trillion. Some analysts warn that the risks to the dollar are to the downside, especially given that the latest data on currency speculator positions on the Chicago Mercantile Exchange show long dollar positions against the euro, yen, Swiss francs and pound. Nethertheless, sentiment towards the dollar is being given some support by a continued correction in the price of crude oil.

Data at 10.00pm: ABC Consumer Confidence.

Monday 2nd June 2008 Interbank
G BRITISH POUND / US DOLLAR 1.9654

US dollar reverses its losses from last week.

US Dollar:
The dollar rallied versus its major rivals as it cast off several anchors when oil prices declined and markets turned their focus to US inflation, boosting investor sentiment in the US currency.

The US government reported the economy grew last quarter at a faster pace than previously estimated. The revised reading of first quarter gross domestic product helped ease some worries over recession, which is defined by two straight quarters of decreasing GDP. Dealers are cautious of the fact that the dollar could pick up some strength on any positive data from the US.

Over the last 4 days we have seen nearly 3 cents pulled back against the euro, from $1.5775 to trade at $1.5481 this morning. Against the pound, the dollar has been range bound for most of the week, with only around 1 cent movement either way.

Data at 1.30pm: Personal Income expected at 0.2% from 0.3% previous, Personal Spending expected at 0.2% from 0.4% previous. At 2.45pm: Chicago Purchasing manager expected at 48.8 from 48.3 previous.
Speakers: Greenspan and Fed’s Rosengren.
 

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