Pound up against US Dollar
The reason Sterling us up against the US Dollar is actually to do with dollar weakness. Yesterday the FED chairman was fairly dovish in a speech, and analysts believe they will soon resume their Quantitative Easing (QE) measures.
QE is where they will create money to pump into the economy to help support the recovery. As with any supply and demand, when there is more of something it is cheaper, and that's what we're seeing with the Dollar.
Pound down against Euro
Despite rising against the US Dollar, Sterling is weak vs the Euro for the same reasons - fears of more Quantitative Easing by the Bank of England. This has weakened Sterling and pushed rates down significantly in recent weeks.
Couple this with the imminent announcement of the spending cuts by the coalition government, and the net result is a very poor outlook for the performance of Sterling for the remainder of the year.
Yesterday's falls were due to weak UK consumer confidence data and a mixed employment report reinforced concerns about the UK's economic recovery.
Today's Data that may affect rates
There are no scheduled releases for the UK today. Jobless data today comes from the USA, along with producer prices.
Not much from the EU today either, other than a monthly report from the ECB. They’ve been bullish of late, which has helped strengthen the Euro. Further positive comments from the ECB could strengthen the Euro further, pushing GBP/EUR rates even lower.
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Labels: Pound down against EUR, Pound up against USD