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You may or may not be aware that the American economy has been stumbling as of late, and there have been plenty of rumours as to how the Federal Reserve will help to stimulate it. Quantitative Easing was the rumour and it is now reality with €75 billion of asset purchases (such as bonds) being brought for the next 8 months. The FED will pump $600 billion in total, a figure not expected by the markets, into the US economy as lowering interest rate just simply isn’t an option. The markets expected $500 billion so with the extra $100 billion we’ve seen GBP/USD hit 1.61 and show no signs of letting up.  Historically QE in the US has been detrimental to the dollar and I believe it will have this effect again until QE is retracted.

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