Pounds Dollars Exchange rates

Pounds Dollars Currency News Archives

Wednesday 31th October 2007 Interbank
G BRITISH POUND / US DOLLAR 2.0724

Dollar soft ahead of FOMC

US Dollar:
The dollar fell again yesterday and overnight ahead of the Fed decision and on very weak sentiment. There is an amazing amount of uncertainty about the interest rate decision this evening with 3 separate camps; one plumping for a half-point cut, one for a quarter and one for unchanged. The odds on favourite is a quarter cut however a decision either way would not be a shock. One a half cut cable should be heading towards 2.0850 and a no move could see cable back below 2.05. The meeting is at 1815GMT so we should see a quiet day heading into the announcement.

Overnight cable rallied through 2.07 easily setting off stops above and now we are resting just below the 2.0750 level. Euro-dollar set a new high.

US GDP is forecast to fall today which won’t help the greenback.
 

Tuesday 30th October 2007 Interbank
G BRITISH POUND / US DOLLAR 2.0589

Dollar weakens on talk of a 0.5% cut

US Dollar:
The dollar came under pressure yesterday during the day with some speculation that the Fed may repeat their 50bp step. Cable traded well through 2.06 reaching almost 2.0650 meanwhile the euro-dollar cross traded above 1.44 for most of the trading day.

This morning a prominent Fed watcher in the WSJ writes that the Fed are not seriously considering a half point move and that any move is no certain thing. The Fed is somewhat caught between a rock and a hard place with pressure on the bank to deliver given the position of the markets and producing actual results in the economy.

This week looks set to be busy in the States with the Fed decision tomorrow, Non-Farm Payrolls and GDP set for release later in the week. Nothing of note today Stateside.

Monday 29th October 2007 Interbank
G BRITISH POUND / US DOLLAR 2.0575

Dollar suffers as Fed rate cut looms

US Dollar:
The dollar remained pressured on Friday and this has fed through to trade this morning. The pressure is coming as a Fed rate cut looms on Wednesday with most market participants looking for, and pricing in a 0.25% rate cut at the meeting.
According to the FT this morning there is ‘anecdotal’ evidence that some of the fed members are worried about the positioning of the markets relating to their imminent pricing in of a cut this month. This may by no means be a set in stone move by the Fed. There are some players in the market banging a 0.5% cut drum but this would come as a shock to the markets given the fed’s decision to move by half a point previously.

This morning cable is pushing highs towards 2.06 and euro-dollar has just posted an all-time high.

Nothing from the US today however Greenspan is set to speak at 1715GMT.

Friday 26th October 2007 Interbank
G BRITISH POUND / US DOLLAR 2.0550

Cable holds around the 2.05 barrier

US Dollar:
The dollar stayed fairly flat yesterday trading around the 2.05 level on cable. There was a brief spike up around lunchtime as stops took the cross to 2.0550. This morning we are holding above 2.05 and the general trend is against the dollar.

November Fed Fund futures now have a 100% chance priced in of a 0.25% cut which is perhaps why the dollar is looking so poor. Morgan Stanley have adjusted their call for the Oct 31st meeting and are plumping for a 0.25% cut.

There was an overnight rumour that AIG could take a hit of up to US DOLLAR 10bn in sub-prime exposure however this was quickly denied by the company.

Michigan is out this afternoon is expected flat.

Thursday 25th October 2007 Interbank
G BRITISH POUND / US DOLLAR 2.0482

Cable fails to break the 2.05 barrier

US Dollar:
The dollar remained surprisingly resilient yesterday despite very poor housing figures from the States. Existing home sales came in massively under forecasts even with the forecasts being poor. Headline data came in low and showed the stockpile of property on the market at a 22-year high. Traders are now focussing on this data and calling for a Fed rate cut by at least 0.25%.

There are now rumours circulating of an imminent Fed discount rate cut on or before 31st October however these were not validated with Fed spokesmen refusing to comment.

On another note Lehman Brothers have set their forecast for Fed rates to be at 3.75% by the middle of next year. New Home Sales should be the highlight of the day.
 

Wednesday 24th October 2007 Interbank
G BRITISH POUND / US DOLLAR 2.0464

Fed rate cut not a done deal: Wall St wants 50 bp, Fed likely to give 0

US Dollar:

The dollar came under pressure yesterday as stocks returned to normal following the wobble on Tuesday. After the 2.c cent cable rally on Tuesday the cross rallied straight line back to the opening levels seen 36 hours earlier. Euro-dollar managed a relief rally too.

The Fed look unlikely to cut rates this month despite calls from Wall Street where some analysts are calling for another 50bp cut. A 25bp cut looks a lot more likely however the Fed certainly have not been making any dovish noises of late in the run up to the meeting. One of the Fed members reasoned that the previous 50bp cut was to stabilise the markets rather than have futures pricing in incremental moves.

Stateside today we see Existing Home Sales and these have been massively talked down in the markets. Any uptick here could see a decent dollar rally.

Tuesday 23rd October 2007 Interbank
G BRITISH POUND / US DOLLAR 2.0384

US dollar rallies on flight to safety

US Dollar:

The dollar posted huge gains yesterday following heavy stock market losses. The dollar was in demand yesterday from investors and their usual flight to safety, predominantly in US Treasuries. The move is encouraging for the US as it shows that despite the dollar negativity, globally investors are still happy to pour into the States when markets look shaky.

Cable managed to fall by over 2.5 cents yesterday and euro-dollar did 2 cents worth of work. Overnight and Fed official warned that the Fed cannot afford to get soft on inflation and that the outside of the housing market the economy is fairly strong.

This morning the dollar is looking moderately softer after a rally in Asian stocks and some Treasury selling in late trade. Not too much to look at from the States today; Richmond Manufacturing index and ABC weekly confidence. Greenspan is speaking his afternoon so it will be worth keeping one eye on the newswires.

Monday 22nd October 2007 Interbank
G BRITISH POUND / US DOLLAR 2.0518

US stocks drop sharply on negative sentiment

US Dollar:

Another tough day for the dollar on Friday slipping on global markets yet again. Stocks dipped on poor earnings and revised profit forecasts pushing the stock market and dollar lower and forcing bond prices higher.

Comments from Fed members failed to stimulate any interest in the dollar even after Bernanke’s comments about stabilising inflation and Poole saying that it would be better to wait than cut rates again.

It doesn’t look altogether great for the dollar this morning with reports over the weekend that Iraq are looking to diversify assets away from the dollar and no doubt more countries will follow. From the off spread betters are predicting a lower opening for stocks which should see yet more dollar selling.

This morning cable is still above 2.05 and euro-dollar is just over 1.43. There are no data releases set for the day however the Fed’s Kroszner is due to speak this afternoon.
 

Friday 19th October 2007 Interbank
G BRITISH POUND / US DOLLAR 2.0474

Dollar hits new lows against the euro

US Dollar:
The dollar came under yet more heavy selling pressure yesterday, this time hitting new lows against the euro.

Unemployment numbers which came out yesterday were surprisingly poor which prompted many in the market to start betting on rate cuts before the end of the year on fears of slowing growth. Markets are now showing a 70% probability that the Fed will cut by the end of October.

In the moments following the data release cable briefly broke 2.05 and euro-dollar popped through 1.43, posting all-time highs. This morning the dollar has opened poorly and is trading near the 2.05 level on cable and euro-dollar is holding at 1.43.

Nothing due from across the Pond today however there are a number of Fed speakers scheduled including Mishkin, Poole and most importantly Chairman Bernanke.
 

Thursday 18th October 2007 Interbank
G BRITISH POUND / US DOLLAR 2.0411

US Beige Book shows growth slowing

US Dollar:
More pressure on the dollar yesterday this time coming from cable and the euro. There was nothing in particular which weakened the dollar in macro terms throughout the day. CPI was flat and there were no surprises in the components. The dollar is finding it difficult to break out of the current trading range which has seen the greenback trading between roughly 2.03 and 2.04 on cable and jumping up and down around the 1.42 level against the euro. We really need a change in sentiment from the Fed to get away from here. This was reinforced by Hoenig’s comments that the Fed will wait for the economy to evolve before making any calls on rates.

Last night the Fed Beige Book Survey showed growth slowing however the weakness seems to be emanating from sectors involved with the housing market. Philly Fed is due this evening.
 

Thursday 11th October 2007 Interbank
G BRITISH POUND / US DOLLAR 2.0382

Dollar rallies as traders ease away from October rate cut

US Dollar:
The dollar remained fairly neutral yesterday with a small sense of a downside. Despite a general feeling that the Fed will not be cutting rates again in October the dollar came under pressure in early trade from the pound and pretty much most of the day from the euro.

Job markets are still tight according to the BLS following data released showing vacancies had not dropped.
This seems to reinforce the Fed’s opinion that most sectors of the market are fairly robust apart from the housing market thanks to the massive chopping up of sub-prime debt.

This morning cable is still around the 2.04 level again following a small upside break to 2.0474 , meanwhile euro-dollar is ticking back up again and is currently nearing 1.42.

Import prices and jobless figures due this afternoon along with inventory data.
 

Wednesday 10th October 2007 Interbank
G BRITISH POUND / US DOLLAR 2.0399

No Fed hints at ongoing rate cuts

US Dollar:
Last night we saw the minutes of the Fed committee meeting for the 0.5% rate cut. The minutes revealed that the vote was unanimous which is in line with recent Fed comments. Members seem confident of a drop in core inflation and acknowledged a tail-off in the employment market. As usual the Fed remain data dependent on future moves.

Fed members are slightly concerned over the depreciation of the dollar and the inflation risks posed by a continued sell-off of the dollar. Following up after the minutes Yellen said that the recent dollar decline is in part due to expectations of a rate cut.

Following a sell-off into the minutes cable rallied sharply back up to the 2.04 level having reached an intraday low of 2.0255.

 US Leading Indicators are due this afternoon along with Wholesale Inventories.

Tuesday 9th October 2007 Interbank
G BRITISH POUND / US DOLLAR 2.0334

S&P: US economy robust aside from housing market

US Dollar:

The US is looking a touch firmer after the holiday yesterday after a quiet days trading. The reaction of Friday’s surprise payrolls is still washing through the market with plenty of players getting caught long in the bond and futures markets.

S&P, the ratings agency, said that it saw the US economy growing at 2% in 2007/8 and that the only major weakness in the economy is the housing market, with other sectors appearing to be fairly robust. It did however see the Fed continuing with their easing policy.

This evening we have the minutes of the fed meeting in which they decided to cut by 0.5%. The market will be looking for an explanation of their thinking and for any future hints at rate moves. Later on in the evening the Fed’s Yellen is set to speak otherwise no data releases are due.
 

Monday 8th October 2007 Interbank
G BRITISH POUND / US DOLLAR 2.0408

Non-Farm Payrolls surprise to the upside

US Dollar:
Non-Farm Payrolls came out and surprised to the upside on Friday afternoon. As thought the revisions were massive which accentuated the move by the dollar. The figure of –4k last month was revised up to +89k which seems to make a bit of a mockery of the initial release. The headline figure also came in slightly above expectations.

Many market watchers are now starting to question the 0.5% cut by the Fed last month on the back of this data. Cable dipped by a cent on the release but quickly pared gains.

The Fed are still concerned over inflationary pressures with member Warsh commenting on upside risks and that it seems the markets are showing signs of ‘normalizing’.

This morning cable is near the 2.04 level and euro-dollar is just above 1.41. Today is Columbus Day in the States and most markets are closed so we should have a fairly quiet day.

Spanish mortgage - IMS Mortgage Spain

Friday 5th October 2007 Interbank
G BRITISH POUND / US DOLLAR 2.0361

Dollar loses out yesterday on below par data

US Dollar:
The dollar lost a bit of value yesterday following slightly higher weekly jobless claims and low factory orders. Any large moves were negated by the fact that we are awaiting the usual once a month Non-Farm Payrolls later on today.

Overnight the Fed’s Fisher said that Q3 GDP was 3% however Q4 is likely to be slower given the tightening of purse strings after the August shake-out. Fisher also said that the credit markets had stabilised since the shockwaves in mid-August.

Today Non-Farm payrolls are expected to come in at 100k however the revisions will make interesting reading after the massively low –4k figure last month.

Nothing else of note from the US today.

 

Thursday 4th October 2007 Interbank
G BRITISH POUND / US DOLLAR 2.0296

Dollar rallies on stronger jobs data

US Dollar:
The dollar strengthened late on yesterday and overnight following the firm non-manufacturing ISM data and strong Monster jobs index. The strong employment figure has eased market tensions ahead of Non-Farm Payrolls tomorrow after last months massively low –4k figure.

Cable has traded down from around 2.04 yesterday morning down to 2.03 this morning. Euro-dollar has dipped again from the 1.42 level to back under 1.4090.

Vietnam has indicated that it is about to stop buying up dollar denominated bonds, including treasuries which should keep a lid on the dollar rally.
The data highlight today is Factory Orders at 1330BST.
 

Wednesday 3rd October 2007 Interbank
G BRITISH POUND / US DOLLAR 2.0414

Dollar weakness still talk of the down approaching G7

US Dollar:
The dollar remained near the 2.04 mark against cable for the majority of the day yesterday and the Eurodollar cross moved down slightly into the 1.41/2 range. The general weakness of the dollar seems to be causing some concern among G7 members with rumours of a concerted approach by the EU, Canada and Britain in the upcoming conference.

ECB members have been particularly vocal on the dollar of late. It’s general weakness is beginning to hurt exports by falsely increasing the value of the currencies.

Ford’s results certainly didn’t help the dollar yesterday; overall vehicle sales dropped by 21% in September as US vehicle sales dropped for the 11th straight month.

This afternoon we have ISM non-manufacturing data along with ADP employment for September.
 

Monday 1st October 2007 Interbank
G BRITISH POUND / US DOLLAR 2.0484

Dollar comes under intense pressure on Friday; opens flat

US Dollar:
The dollar got caught in the firing line on Friday as it was sold off aggressively. The weakness came on the back of a fairly negative week in terms of sentiment on the dollar. Many of the Middle East Gulf states have been making noises about de-pegging from the dollar; whether this is the usual sabre-rattling or indeed just rumours is yet to be see.

Over the weekend the Fed’s Poole said ‘further action is possible but the markets shouldn’t bake into the cake more cuts’. The opening for the dollar has been fairly uninspiring with further data needed before a direction is found. Cable is trading up towards 2.05 and euro-dollar just shy of all-time highs again.
On the data front there is only ISM manufacturing and prices paid out at 1500BST.
 

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