Pounds Dollars Exchange rates November 2007

Pounds Dollars Currency News Archives

Friday 30th November 2007 Interbank
G BRITISH POUND / US DOLLAR 2.0662

Dollar fights back on global liquidity problems

US Dollar:
The dollar rallied from the off yesterday and still remains well bid on the back of problems in the global credit markets. With banks raising their borrowing costs, not to just customers but each other, the dollar has again become the ‘safe’ currency with investors rushing towards Treasuries and pushing the dollar bid.
The move was exacerbated by the rumours coming from the markets about a $12bn hole in the books on the back of SIV and sub-prime worries. The rumours prompted a mass GBP sell and US DOLLAR purchase again with the more safety-prone investors asking for T-bond prices.

GB POUND yesterday came in absolutely bang on the money helping the dollar as many were expecting growth to turn negative.

Today we have PCE data which is forecast to remain unchanged.
 

Thursday 29th November 2007 Interbank
G BRITISH POUND / US DOLLAR 2.0728

Dollar turns negative as stocks rally

US Dollar:
The dollar started the day on the front foot following a downward break through 1.48 on the euro-dollar cross . The dollar managed to rally by a full cent on the euro and the pound on the technical breakout. Uncertainty crept back into the dollar market in the afternoon session as stocks started to turn around and further worries over Fed policy started to take hold.

Overnight the Fed’s Fisher said that the Fed now faces a dilemma with the economy facing inflation risks but any action will have to ensure the ongoing problems don’t derail the economy as a whole. Fisher is a nonvoting member and overnight Kohn, vice-chairman, said that he would be open to a rate cut.

Today we see the preliminary GDP reading for the quarter which should make very interesting reading and will confirm if the economy is indeed slowing down.
 

Wednesday 28th November 2007 Interbank
G BRITISH POUND / US DOLLAR 2.0626

Stocks still on edge in the banking sector

US Dollar:
The dollar managed a small rally yesterday despite a drop in consumer confidence data from November. The figure came in a full 6 points below expectations however this is hardly surprising given the state of the US housing market at the moment.

The dollar mounted an assault on parity against the CAD but failed just short of evens.

Trade was choppy with mixed US news about HSBC and Citigroup problems. Today we see Durable Goods, Beige Book and Existing Home Sales amongst other things so we should see some direction this afternoon.
It seems that the dollar is waiting for the resolution of the market vs Fed conflicting views about the December movement in rates.
One of the major banks is looking for Fed Discount rates to hit 3% in 2008.
 

Tuesday 27th November 2007 Interbank
G BRITISH POUND / US DOLLAR 2.0690

Shockwaves in the markets send stock markets down, bonds up

US Dollar:
The dollar continues to remain weak as worries remain about a possible de-peg from the US dollar of Middle Eastern currencies. Yesterday the rumour was the UAE are reconsidering the peg to the greenback. In a databarren day the rumour mill started this time causing fairly hefty stock market losses and bond market gains.

Goldman Sachs slashed HSBC’s rating from hold to sell citing a possible $12bn black hole for the position in strategy. The dollar did keep a firm footing on the back of stock market confidence with news that Abu Dhabi are to take a 4.9% holding in Citigroup.

Another thin day on the data front Stateside with Consumer Confidence and Redbook sales both looking to slip slightly.

No Fed speakers on the horizon.
 

Monday 26th November 2007 Interbank
G BRITISH POUND / US DOLLAR 2.0668

US Retail Sales surge after Thanksgiving

US Dollar:
The dollar rallied sharply on Friday following a failed break-out targeting 1.50 on euro-dollar. Since the sharp up-tick the dollar has drifted on the back of reports that China are to diversify some o their massive FX reserves and invest in Japan.

It is worth noting that the traditional post-Thanksgiving retail sales spiked massively on Friday however this news was tempered by the fact that overall spending was down; retailers were offering massive discounts to stimulate sales.

There is plenty of talk in the market that the US is likely to enter a recession in 2008 on the back of the economic slowdown haunting the markets.

No figures or speakers due today from the States.

Spanish mortgage - IMS Mortgage Spain

Friday 23rd November 2007 Interbank
G BRITISH POUND / US DOLLAR 2.0733

China diversification keeps dollar on back foot

US Dollar:
The dollar did indeed remain under pressure yesterday on the back of a published report underlying the intentions of the Chinese governments with respect to their US dollar reserves. It is thought that China have almost $900bn in assets under dollar denomination which would, if sold to market, cause a massive dollar dip and bond market yield spike.

In other news larger institutions are beginning to report ‘paper’ losses on the back of the low level of the US dollar. Balance sheets are now being undervalued by the unprecedented levels of the greenback versus the euro. The latest to report their concerns is the Airbus group who now cannot ‘afford the investments it made last year’ based on loose budgeting controls.

Thanksgiving weekend means that data is limited today and there are no speakers.
 

Thursday 22th November 2007 Interbank
G BRITISH POUND / US DOLLAR  2.0638

Dollar remains under pressure on credit worries

US Dollar:
The dollar should remain fairly range-bound today as the markets in the States are closed for Thanksgiving.

Yesterday the dollar was sold off moderately but with no real purpose or direction. There were more rumours of institutional write-downs which certainly didn’t help but the markets seem to be in a bit of a quandary about the Fed’s December intentions. A cut of 0.25% is all but priced into the futures markets but the noises from the Fed are more hawkish than the futures suggest. Given they have moved by 0.75% already the Fed may decide to leave rates on hold and have a look at incoming data in 2008. The housing market is the obvious concern but inflation remains elevated with oil and food prices at their current levels.

A quiet day should be on the cards with the markets closed however lack of liquidity could see exaggerated moves. No figures or speakers today.
 

Wednesday 21th November 2007 Interbank
G BRITISH POUND / US DOLLAR  2.0647

Dollar hurt on Eastern/Asian worries

US Dollar:
The dollar remained on the back foot yesterday following the rumours of an emergency Fed meeting emanating from Asian markets. This added to rumours of the Chinese diversifying US DOLLAR FX reserves and Arabian nations depegging saw the dollar fall against most currencies.

Euro-dollar hit an all time high this morning at 1.4855. Last night the minutes of the October Fed meeting revealed that the decision to cut was a very ‘close call’ and it lowered 2008 GDP forecasts citing weak housing and costly energy prices amongst other factors.

Merrill Lynch are looking for US rates to be at 2% by mid-2009 which is also keeping pressure on the dollar in early trade.

Minor data due today and no speakers due.

Tuesday 20th November 2007 Interbank
G BRITISH POUND / US DOLLAR  2.0578

Dollar could rally if Fed surprise investors

US Dollar:
The dollar has the potential to rally from these levels if some of the speculation in the market is correct. Interest rate futures have an almost certain rate cut priced in for December however if some of the commentaries are true the Fed may surprise markets and opt for a no move. A lot of the noise from the Fed has been fairly moderate which may indicate that the current interest rate levels may be enough to weather the credit and housing storm and stimulate growth.

Today the Fed publish their 2008 economic forecast and they are likely to show the economy to pull through the near term rough patch however are likely to note downside risks to the forecast. The forecasts coincide with the November minutes which are released this evening.

There are rumours of an emergency Fed meeting circulating at the moment from Asian markets.

Monday 19th November 2007 Interbank
G BRITISH POUND / US DOLLAR  2.0508

Dollar takes small hit on UAE comments

US Dollar:
The dollar remained fairly stable (1 cent range on cable) on Friday with some fairly benign data and general dollar demand on international markets.

Overnight the UAE surprisingly released comments quoting the adviser council that ‘now maybe the time to reconsider USD peg’. Inevitably the dollar took a bit of a hit on the back of this however Saudi Arabia said quickly it had no plans to depeg against the dollar and it was surprised by UAE comments.

Elsewhere Fed members remained fairly ambiguous on rate directions and timings but the general tone was fairly negative on growth and the housing market in 2008. TS Paulson warned that the US housing market problems were not over and posed the biggest risk to the UK economy.

No US figures are due today but we do have a couple of Fed speakers.
 

Friday 16th November 2007 Interbank
G BRITISH POUND / US DOLLAR 2.0475

Dollar continues to rally as confidence falls in financial markets

US Dollar:
The greenback remained fairly well supported yesterday amid worries that confidence in emerging markets and stock markets was beginning to crumble.

The general feeling in the markets is not one of certainty hence the safety buying of the regular dollar-denominated assets.

 Cable traded down to 2.0404 in early Asian trade meanwhile euro-dollar spent most of yesterday with a 45 handle.

Yesterday CPI data was in line with expectations however the expectation was for the headline data to jump which it did indeed do.

Today should be quite interesting with Capital Flow data being released. The TIC data essentially shows how the money is moving and is looked at alongside the trade balance. In addition we have Industrial Production which is set to be unchanged. Fed’s Lockhart to speak at 1500GMT.

 

Thursday 15th November 2007 Interbank
G BRITISH POUND / US DOLLAR2.0570

Dollar soft as market looks for a December ease in policy

US Dollar:
The dollar rallied from mid-morning yesterday with some very keen buyers at the expense of the pound which pushed the dollar higher on the markets.

Some fairly benign/soft data in the afternoon begun to attract dollar sellers and Asia overnight have forced the dollar lower on global markets.

Jim Rogers, a harsh critic of the Fed and in particular Bernanke, as well as being a very shrewd investor overnight urged anyone holding dollars to sell them and sell them fast. His alternative investments are commodities, JPY and CHF. It is worth noting that Rogers is quite often very vocal with his opinions.

Today is a big day in the States as the CPI figures are released at 1330GMT with the year-on-year figure expected to jump by 0.7%. Stripping out food and energy CPI ex is due just 0.1% higher. We also have the Empire survey, weekly jobless claims and Philly Fed.
 

Wednesday 14th November 2007 Interbank
G BRITISH POUND / US DOLLAR 2.0758

Dollar weakens as stock markets post gains

US Dollar:
A small appetite for risk crept back into the markets yesterday as stock markets started to post some gains after a 2-day fall which pushed the dollar onto the back foot again. Stock market gains did help cable rally in the afternoon session. Some mild support was taken from Fed member Fisher who said that the recent rises in oil prices and food prices will have an upward pressure on inflation and that the economy is growing at a sustainable pace. Fisher said the Fed must remain ‘far from smug’ on inflation.

The stock market was boosted by the blue-chip stocks and indices adding some much needed confidence on earnings. The market seems to think that a lot of sub-prime losses have already been disclosed. Plenty of data to get stuck into today the highlights being PPI and Retail Sales. Bernanke also to speak
 

Tuesday 13th November 2007 Interbank
G BRITISH POUND / US DOLLAR 2.0658

Dollar continues to rally on flight to safety

US Dollar:
The dollar continued to rally strongly yesterday managing almost 3 cents on cable and well over a cent against the euro. The reason for the dollar strength is the uncertainty surrounding the stock market. Globally investors cashed up their emerging market and high yield stocks and headed for the safe havens of dollar denominated assets. This risk aversion play saw the dollar add some solid gains on the day following almost two weeks of losses.

The US bond market was shut yesterday which did take some of the liquidity from the market which may have exaggerated the move.

This morning dollar has weakened from the off and is trading down slightly probably on profit-taking after the rally.

Nothing too much to speak of on the data front to move the market.

Monday 12th November 2007 Interbank
G BRITISH POUND / US DOLLAR 2.0852

Cable dumps as Barclays rumours circulate

US Dollar:
Not the most spectacular day for the dollar on Friday, that is unless you take a look at cable. Cable hit a high of 2.1159 in early trade and this morning is now trading down at the 2.08 level. This fairly spectacular rally by the greenback over the pound was initially caused by UK based rumours.

Stock markets struggled again globally which caused the usual run out of stocks and into Treasuries and gold which is the usual safety play.

Goldman Sachs may have increased dollar demand with reports that they are looking to cut emerging market positions as the credit markets sort themselves out which again would see investors heading for the safer investments. Today is a US holiday and no data releases are set for release.
 

Friday 9th November 2007 Interbank
G BRITISH POUND / US DOLLAR 2.1130

Dollar takes further losses on Bernanke comments

US Dollar:
No prizes for guessing what happened to the dollar yesterday. Another down day on the markets for the greenback which can’t seem to catch a break. The dollar was sold pretty much from the off yesterday on the markets and with stops being set off left, right and centre the selling pressure continued to mount.

Bernanke said yesterday that Q4 growth is expected to slow ‘noticeably’ and would remain soft in the early part of 2008 and coupled this with comments of elevated inflation risks due to the high levels of oil. The dollar was not helped by rumours of yet another institution in trouble.

In the Wall Street Journal a report by Capital Economics sees US inflation at 5% at the end of the year should current oil prices remain at these levels.

This afternoon’s trade balance is more than likely not going to help the dollar
 

Thursday 8th November 2007 Interbank
G BRITISH POUND / US DOLLAR 2.1008

Dollar weakens further on China diversification worries

US Dollar:
The dollar opened poorly yesterday and things only got worse for the sick man of the currency markets. Following Chinese comments that they are set to balance US FX reserve risks by investing in stronger currencies the dollar was heavily sold.

Cable started the day above 2.09 and reached a peak of 2.1070 before retracing slightly and the euro-dollar set a new high above 1.47.

Overnight the dollar has gained a modicum of support following very heavy losses on Wall St which will see investors flooding into dollar-denominated Treasury bonds and commodities. The Wall St losses were blamed on further write downs by Morgan Stanley, soaring oil prices and worries on the outlook for the banking sector.

Data release Stateside today are a touch light on the ground with Jobless Claims the highlight. Bernanke is set to speak at 1500GMT but given current market conditions, expect volatility.
 

Wednesday 7th November 2007 Interbank
G BRITISH POUND / US DOLLAR 2.0933

Dollar slammed as China reveal plans to diversify

US Dollar:
The dollar took another hit yesterday during the day as stock markets pushed back from Monday’s dip however a new wave of dollar sellers hit the market overnight as a Chinese official revealed plans to diversify away from the dollar. The actual comment was that China ‘will favour stronger currencies over weaker ones, and will adjust accordingly’. This is fundamentally bad for the dollar which saw the greenback hit all-time lows against the Canadian, 26-year low on the pound and 23-year low against the Aussie dollar.

The dollar could gain some support from Fed member Plosser who last night said that although growth was slowing, it wasn’t enough to warrant a rate cut just yet. Conversely both Greenspan and Soros think that the US is in a worse position than the Fed will admit.

Not too much data today however there are six Fed speakers due this afternoon.
 

Tuesday 6th November 2007 Interbank
G BRITISH POUND / US DOLLAR 2.0846

Dollar fights back as global stocks dip

US Dollar:
The dollar fought back amid a wave of pressure yesterday as the standard practice of running for cover started as stocks dip.

 There were more than enough rumours of write-downs by banks covering losses in the sub-prime sector to push global stock markets down which prompted a wave of US dollar and Treasury buying which is standard practice in uncertain periods.

Cable traded down from 2.09 to 2.08 virtually in a straight line yesterday. Sub-prime issues could get worse before getting better according to Fed member Kroszner which is unlikely to help out any market today!

Greenspan noted that the weak dollar may increase inflation in the US.

Today in the States we have ABC consumer confidence after the UK close however all eyes will be on Fed Chairman Bernanke speaking at 1840GMT.
 

Monday 5th November 2007 Interbank
G BRITISH POUND / US DOLLAR 2.0830

Dollar under more pressure as cable hits 2.09

US Dollar:
The dollar took another pasting on Friday as the negative sentiment again kept the dollar offered. The greenback mounted a brief comeback on the Non-Farm data which came in way above expectations however once the initial excitement subsided and the earnings figures and revisions had been looked at, the dollar sellers came back to market. Cable briefly rallied through 2.09 however has gapped slightly lower this morning.

The Chief Exec of Citi resigned yesterday after the bank disclosed further Q3 losses linked to the sub-prime sector.

Cable this morning is trading just under 2.09 meanwhile the euro-dollar is just sub-1.45. The Loonie rate posted an all-time low on Friday hitting 0.9320.

Today the Fed’s Mishkin speaks and non-manufacturing ISM is due lower.
 

Thursday 1st November 2007 Interbank
G BRITISH POUND / US DOLLAR 2.0790

Fed cut rates by 0.25%

US Dollar:
The Fed opted to cut rates by 0.25% last night which was widely expected by the markets. The headline rate now stands at 4.5% following the move.

The Fed decided to move rates in order to stimulate the economy after confidence dropped and some negative signals in the housing market. The news was not all bearish for the US with the Fed commenting that inflation risks remain elevated and one Fed member, Hoenig, voting for a no move in rates.

The dollar traded lower all day leading up to the decision ending the day at 2.08 on cable and up towards 1.45 against the euro.

This morning cable is still near the 2.08 level as markets take a breath before Non-Farm Payroll tomorrow and traders decide what the next Fed move will be. ISM this afternoon is set to rise.

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