FindCurrency.com

By Rob Bastin

After early morning losses the pound was able to recover and rebound against all major currencies, with the best gains seen against the greenback with GBP/USD exchange rates up by 1% in the afternoon hitting a 3 week high. Positive housing data for the UK was the main driver of these gains on Tuesday. Tomorrow morning at 9:30am the Bank of England release their much awaiting minutes from March’s interest rate decision. A split decison result of the decison to not extend QE could easily see todays gains wiped out.

By Michael Vaughan

Sterling exchange rates have again performed poorly against both the US and Canadian dollar falling nearly 1% in each case. Sterling has been preforming poorly mainly due to political concerns over the very real possibility the UK will find itself with a ‘hung parliament’ come election time, a situation which could be catastrophic for the pound.

By Leigh Smith

Watchers of the currency markets may remember the time when the Pound was seen as a ‘safe haven’ for funds, and more recently the Euro. Today it is a completely different scenario.

As you are probably aware, debt levels in both the UK and Eurozone have reached record levels. This has brought about the question that will banks and nations retain their current credit ratings. This week Deutsche Bank had its credit rating downgraded two places by rating agency Moody’s, and the focus it still firmly on both UK banks and the UK economy as a whole on whether the coveted AAA rating will remain intact.

What does this mean for these entities however? In general terms, it means less preferential repayment terms on debt; a factor which leaves investors looking elsewhere. This is where the US Dollar has come to the front of the queue of currencies looking to be classed as the ‘safe haven’. This most certainly has been the case, and GBPUSD and EURUSD exchange rates have reacted accordingly.

A question I ask you is how long do you think it may be before the uncertainty surrounding the UK and Eurozone disappears? That may be the key thing to think about whilst watching the cost of buying US Dollars increase. If you need to buy US Dollars, can you afford for the rates to fall?

By Leigh Smith

Quite against movements of late, we have seen the Pound strengthen today on the back of the Bank of England’s inflation survey which showed inflation expectations for 2010 were slightly higher than previously expected.

But why did this help strengthen sterling when the Pound was on such a poor run? Because higher inflation generally leads to increases in interest rates, and high interest rates attract investors. If investors start to gain confidence in the UK once again then typically we would see GBP exchange rates rise as the UK Pound becomes more sought after.

I however, think these gains will be short lived, and political uncertainty will come back to haunt the Pound in the very near future.

By Rob Bastin

Sterling had another tough day on the markets today contuing the losses seen so far this week. Poor industrial and manufactoring figures showed contractions of 0.4% and 0.9% respectively which saw the pound drop by 0.35% against the US and Canadian dollars by the afternoon. Analysts had been expecting postitive growth and so these figures have put even more pressure on the already suffering pound.