Pound Reaches Five Month High Against US Dollar

As the US economy continues to feel the pressure, Sterling is trading at the mid-market rate of 1.5527 against the US Dollar at 11.45 this morning, hitting some of the highest levels seen for five months. Speak with your Currency Solutions broker today for any upcoming GBP/USD transfers to discuss taking advantage of the current positions by fixing the rate now for the future.

Pound Sterling – UK Markets

The Pound has risen against the US Dollar over the past twenty four hours hitting a five month high. The Pound lost ground against the Euro on Monday but has since recovered losses thanks to positive retail figures. As at 11.45am GBP/EUR traded at 1.1939. The mood on the economic outlook in the UK continues to be positive as the Pound also continues to benefit from decreased confidence in the US Dollar. Today’s CBI’s distributive trade survey for July showed a continued month on month improvement, with the balance of retailers reporting that sales were up to five percent in July.

US Dollar – US Markets

Data from the US Commerce Department has revealed that new US home sales rose by 330,000 in June - much more than the expected increase of 310,000. This comes as a lonely piece of positive data on the US economy, which has been recently overcome by negative reports causing the Dollar to fall against the Pound and Euro. However, some are interpreting this data as the first piece of news that the US housing sector may be over the worst. Today’s data release on US durable goods orders is also expected to show a 1 percent gain in June to add to the optimism. Individuals such as the Federal Reserve Bank of Philadelphia President have also spoken out to say it’s too soon for stimulus measures to be increased and that the slowing pace of the US recovery has been over hyped. US consumer confidence figures out today will be closely watched by markets. Despite these initial suggestions that the recovery may be picking up again, the Dollar continues to suffer pressure. Despite the cynical response to European stress tests, the Euro is still by far winning out.

Euro – European Markets

Despite the skeptical reaction to the stress tests, some confidence has been rebuilt in the Euro which is also benefiting from the current negative outlook on the US economy. Some new European data reports such as a German consumer sentiment index due today are also expected to increase confidence further. The Hungarian Forint has claimed back some of last week’s losses against the Euro on increased speculation that Hungary will resume its talks with the International Monetary fund following the suspension of these rescue package talks last week.

Other Currencies – Highlights

The Japanese Yen has been making the headlines, falling to a seven week low against the Euro as investors have instead focused on riskier assets. This is not in line with the currency's typical trend of constant strengthening. The Japanese finance minister has refused to comment on his plans for the currency whose popularity causes a negative impact on Japanese exports. The Australian and New Zealand Dollars are near their strongest levels since January as both economic recoveries show signs of increased momentum with the New Zealand central bank expected to raise borrowing costs this week. For a live quote or to tell us about your foreign exchange requirements, please call us on +44 (0)20 7740 0000.