Sterling gives back recent gains
Disclaimer: THIS MATERIAL IS NOT INVESTMENT RESEARCH AS DEFINED BY THE FINANCIAL SERVICES AUTHORITY
A poor finish for Sterling last week, the pound was sold against the Euro and US dollar. The UK economy continues to look fragile against the main players across the globe. Last week GBP/EUR traded above 1.13 before finishing the week near its lows at 1.11. A similar move in cable where the market traded at a high of 1.6878 on Monday before being sold back below 1.65
Yesterday in an interview with the Dow Jones, Federal Reserve Bank of St Louis President James Bullard commented that he would prefer to keep the central bank’s asset purchase programme active for an extended period keeping US interest rates low. This morning the US dollar is under pressure on the back of the weekend comments. James Bullard will be a voting member next year. These comments are another nail in the coffin for the US dollars whilst higher yielding currencies continue to prosper. In addition, the surging gold price is certainly not a good indicator for a greenback recovery.
EURO/USD is still trading below the October high of1.5063, this is a key level for FX traders particularly dollar bulls who are looking for this level to hold.
Monday 23 November 2009, 12:15pm
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