Currency Exchange UK

 

Pound Up against US Dollar

Pound Up against US Dollar

The British Pound was up against the US dollar by 0.7 per cent to $1.6638 on Monday.  This proved to be a rebound after two-week lows last week and was largely down to higher risk appetite.

There is much speculation around the US monetary policy – will the central interest rate there remain low for much longer? 

Many believe it will, and general policy there has been described as ‘loose’ by some economists.

In other words, it is widely believed that the US Federal Reserve will continue to keep the economy liquid in ‘ample’ amounts – leaving investors free to return to a more risky sentiment.

This view was boosted by Federal representatives saying that its current QE programme would continue until at least March 2010.

The euro did not change much against the sterling on Monday – reaching around 90.07 pence in the middle of the days’ trading after having reached 90.40 pence earlier in the day – a weekly high.

Traders in the UK market are speculating over the Government and what a new cabinet would mean for the pound.  An address on the latest Inflation Report is also awaited in anticipation later this week.