Pounds Dollars Exchange rates

Pounds Dollars Currency News Archives

Friday 28th September 2007 Interbank
G BRITISH POUND / US DOLLAR 2.0215

US economy ‘OK’ according to Fed’s Mishkin

US Dollar:
The dollar again looked soft yesterday coming under pressure from all sides. Euro-dollar is still trading up at all time highs and cable this morning has dropped almost a cent since midnight. It is quite possible that the massive share issue in China by Shenhua Energy could have prompted an outflow from the dollar into yuan.

Yesterday Mishkin from the Fed said the US economy is ‘ok’ despite the downturn in the housing market. This
is hardly inspired confidence in the trading community hence the selling of the dollar market.

It is worth noting that the Fed’s primary discount facility fell to zero yesterday as confidence begins o creep back into the credit markets.

This afternoon there is some punchy data due out; amongst others we see PCE, Chicago PMI and have a final look at the Michigan figure.
 

Thusday 27th September 2007 Interbank
G BRITISH POUND / US DOLLAR 2.0233

Dollar again soft this time on Durable Goods data

US Dollar:
As expected US Durable Goods came in lower than expected yesterday capping any gains for the dollar. Cable rallied back from around the 2.01 level up to just short of 2.02 following the release. Looking at the 60 minute chart (below) cable is sitting nicely in a 1 cent trading band between 2.01 and 2.02.

Elsewhere US State data suggested that the –4k Non Farm Payroll may have been overstated blaming a large fall in local government payrolls at the time of the poll.

Former Fed Chairman Greenspan in his book suggested that the policy regarding benefits to retirees will cause a ‘tsunami’ heightening inflation pressures and may force the Fed into double-digit interest rates.

In the States today we have plenty to look at including GDP and New Home Sales. In addition we have 3 fed speakers including Chairman Bernanke.

Wednesday 26th September 2007 Interbank
G BRITISH POUND / US DOLLAR 2.0172

Dollar soft again despite Fed assurances

US Dollar:
The dollar came under renewed pressure yesterday after a decent start to the day. The overriding feeling in the market is that there are more rate cuts in store for the US economy hence the downtick in the US dollar.
Known hawk Plosser of the Philadelphia Fed last night said that only ‘much weaker’ would see the Fed cut rates after the 50bp move last week. He also said there was no question that the cut would aggravate inflation which may see the Fed have to push up borrowing costs again.

Yesterday a soft consumer confidence was offset by a slightly better than expected existing home sales number.

An ongoing strike at General Motors may well start to eat into the GDP figure which will keep the dollar pressurised in the foreseeable future meanwhile the dollar will remain on the back foot this morning in expectation of a weak durable goods number.

Tuesday 25th September 2007 Interbank
G BRITISH POUND / US DOLLAR 2.0104

Dollar grinds higher on Fed’s Fisher

US Dollar:
The dollar managed to eke out a small gains yesterday in quiet trade. Having started the day on the back foot both cable and euro-dollar ground away from their highs. Part of the reason behind the push higher was down to Fed member Fisher who did his best to toe the hawkish line. He said the Fed were ready to adjust policy up or down, warning against a too generous policy as a source of moral hazard.

 In a muted trade session the dollar did manage to knock out some profits. Nothing on the wires from Bernanke yesterday.

This afternoon there is plethora of data due out. At 1500BST we see Consumer Confidence, the Richmond Manufacturing Index and perhaps the most important of the lot, Existing Home Sales. The homes data is expected to show a sharp decline given what happened to markets in August. On top of this we also have weekly ABC Consumer Confidence.

Monday 24th September 2007 Interbank
G BRITISH POUND / US DOLLAR 2.0290

Dollar comes under further pressure from rate-cut speculation

US Dollar:
The dollar remained under pressure on Friday following the speculation that the Saudi’s may drop the dollar peg. Despite reassurances from the Middle East that this is not the plan the dollar’s fall continued.

Business Week ran an article suggesting the Fed may just be warming up rate cuts with the prospect of a lot more to come in the future.

Fed member Kohn on Friday suggested that if it weren’t for the fall in the housing market the Fed would not have eased at all. If true this is a hugely hawkish statement however given the 50bp move it seems like this may not be a whole truth.
Nothing on the data front from the States today however Fed Chairman Ben Bernanke is set to speak at 1800BST and the markets seem to be focussed on this.

Friday 21st September 2007 Interbank
G BRITISH POUND / US DOLLAR 2.0100

Dollar nailed on speculation Saudi may drop dollar peg

US Dollar:
The dollar came under renewed pressure yesterday on the back of an article carried by the Daily Telegraph
suggesting that Saudi Arabia may be prepared to drop the peg to the US dollar. The Saudis refused to cut
interest rates in line with the US causing a ‘stampede’ away from the dollar in the Middle East. With the region
managing somewhere in the region of $3500bn it is easy to see why these jitters caused a dollar fall.
Late in the day yesterday the Saudis did say it planned to keep the riiyal’s peg to the dollar however the inflationary
risks to the region meant that interest rates could not be cut.
Fed Chairman Bernanke said yesterday that he expects the crisis in the US mortgage market to be resolved
by March of 2008.
No data releases today but plenty of Fed speakers due this afternoon.

Thursday 20th September 2007 Interbank
G BRITISH POUND / US DOLLAR 2.0026

Dollar remains weak following Fed cut

US Dollar:
The dollar stayed near levels reached on Tuesday following the Fed’s decision to cut rates by 0.5%. According to figures released yesterday inflation does not seem to be a problem despite oil printing a record high and the continuation of the recent precious metal rally. Headline CPI dipped slightly however core inflation came in on the money as predicted by analysts.

Fed Fund futures are looking for a further 0.25% cut at the October meeting with another decrease of 0.25% in the early part of next year.
Plenty to have a look at today from the States with weekly jobless claims, leading indicators and Philly fed survey in addition to Bernanke speaking at 1500BST.

Spanish mortgage - IMS Mortgage Spain

Wednesday 19th September 2007 Interbank
G BRITISH POUND / US DOLLAR 2.0156

Fed opts to cut aggressively: 0.5% cut

US Dollar:
The Fed surprised markets yesterday by cutting rates by 0.5%. There was a small chance of this move happening but the Fed decided to act pre-emptively and offset the impact to the economy from the recent disruptions.
The Fed gave no clue as to whether further rate cuts were in the pipeline but the bank may be ready to take back this ‘gift’ at any point should we see a recovery.
Cable immediately rallied on the back of the announcement after the UK close pushing up through 2.00, 2.01 hitting a high this morning of 2.0170. This level is a breakout from a technical retracement. The dollar suffered globally following the decision but on the other side of this US and global stock markets rallied sharply in anticipation of accelerating growth.
US inflation will make interesting reading today especially if it comes in higher than the 2.1% expectations.

US Fed expected to cut rates by 0.25% today

Tuesday 18th September 2007 Interbank
G BRITISH POUND / US DOLLAR 1.9894

US Dollar:
All eyes today are firmly on the Fed rate decision due at 1915BST this evening. The Fed are fully expected to cut by at least 0.25% and there is an outside chance of a 0.5% cut. Bearing in mind inflation is still a worry for Fed members a half percent cut at this stage seems very unlikely. 

Also on the table will be the discount rate which the Fed cut in response to the sharp stock market slump in August. Most observers think that another cut in discount rates will encourage banks to borrow from that window as opposed to the interbank market which is not what the Fed would want.

Yesterday cable again dipped and is now under 2.00 as UK fears continue to spread to the FX market. The cross hit a low of 1.9877 overnight.
Aside from the Fed today we have US PPI and Capital Flows.

Monday 17th September 2007 Interbank
G BRITISH POUND / US DOLLAR 2.0010

• US Fed rate cut talk will more than likely dominate today
• Greenspan: 1 in three chance US could go into a recession

US Dollar:
Plenty of news to digest this morning and no doubt the week ahead Stateside. Tomorrow the Fed are fully expected to cut rates by at least 0.25%, possibly even 0.5%. Until then action should be limited in the markets.
Former Fed Chairman Greenspan has been fairly active in the press this weekend commenting on the current state of the economy. Of his more significant comments he sees a one in three chance of the US slipping into recession, US house prices could fall dramatically and the sub prime issues may even spread to car loan market.
None of this is bullish for the dollar hence it is trading near lows against the euro this morning.
Cable is trading near lows although this is more to do with UK economics. With very little in the way of data today the gunpowder will more than likely be kept dry for tomorrow.

Dollar stabilises on expectations of 0.25% cut next week
A relatively quiet day for the dollar yesterday as traders remain in the holding pattern ahead of the Fed rate announcement on Tuesday. Despite calls from the big investment banks to cut by 0.5% the Fed will more than likely adopt a softer approach and cut by 0.25%. It’s more than likely the banks calling for a larger cut have financing problems.
The talk this morning is of a major credit crunch globally on the back of the sub prime problems in the US.
Yesterday prime borrowing hit $7bn, the highest since September 2001.
This morning cable is massively down trading at the 2.02 level (more below) meanwhile euro-dollar pulled back to under 1.39. Plenty of data out of the States this afternoon with Retail Sales forecast to fall and the Univ of Michigan confidence figure forecast to rise slightly.

Thursday 13th September 2007 Interbank
G BRITISH POUND / US DOLLAR 2.0272

Dollar remains steady with Fed expected to cut by 0.25%

US Dollar:
The dollar stayed fairly steady yesterday with a small down-tick as investors realise that a series of rate cuts are now on the cards. Futures now have a 0.75% cut priced in by the middle of next year. The risk to the economy still lies with inflation as oil prices continue to trade through the roof and the falling value of the dollar makes goods worth more. Yesterday the dollar index hit a 15-year low.
It is worth noting that following emergency cuts in 87 and 98 the Fed quickly re-established it’s pre-crash stance.
This morning euro-dollar is trading at all-time highs meanwhile cable is just sub 2.03. Not too much due from the US today on the data front; weekly employment figures are due out just after lunch. This evening there is the monthly budget statement which may make interesting reading for August.

Wednesday 12th September 2007 Interbank
G BRITISH POUND / US DOLLAR 2.0347

Dollar squeezed as consumer confidence falls

US Dollar:
The dollar remained under pressure yesterday with increasing central bank rhetoric over future rate cuts, an in-line trade balance and falling consumer confidence. Treasury Secretary Paulson said he saw the lack of confidence in the credit markets lasting far longer than expected meanwhile early Fed comments were deemed dovish by traders hence the dollar drifting. The massive US trade deficit came out in-line with expectations and ABC Consumer Confidence fell to –17 with the mortgage squeeze really hitting home.
Major job losses are expected in the credit/mortgage market in the US which certainly won’t help out an economy already feeling the heat.
Cable this morning is trading well through 2.03 and euro-dollar is sitting near all-time highs around the 1.39
level. No major data releases for the day and no speakers due.

Monday 10th September 2007 Interbank
G BRITISH POUND / US DOLLAR 2.0289

No farm payrolls lower than expected and weaken the dollar

The dollar is again on the ropes after the all important non-farm payrolls came in showing a net loss of 4,000
jobs. This is the first time we have seen a negative figure upon release. The dollar ease to 15 year lows
against a basket of currencies and poor jobs data didn’t help. This is only adding to speculation that the US
may be on the verge of a recession. And this is also putting pressure for the fed to cut rates this month.
There are some calling for a 50 point cut.
Speakers today are Lockhart, Yellen and Swage. Consumer Credit data at 20.00

US rate cuts not a certainty ,but likely

US Dollar:
The dollar remained under pressure on Friday as the Fed’s Bernanke spoke at the Jackson Hole conference. It is not a certainty that the Fed will cut rates in September however it does seem likely unless economic conditions recover rapidly.
Markets were buoyed by Bush’s comments that domestic policy will try to help out struggling borrowers but he did stress that the government were not obliged to bail out speculators.
This morning the dollar is trading near the 2.02 level on cable and mid-1.36 on euro-dollar. Any dollar moves may well be accentuated by thin volume today as today is a US holiday.
Given the fact it is a holiday there are no US numbers due today and no Fed speakers are scheduled to hit the wires.

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