The US dollar strengthened back over sterling by 0.45 on Friday to close at the 1.4459 level, but still suffered its worst weekly losses for 24 years against a basket of major currencies. News that the Federal Reserve will print more than $1 trillion, to purchase government and mortgage-backed debt in a bid to cut interest rates and kick-start lending, saw the dollar weaken the most since the 1985 Plaza Accord, when major economies agreed to a formal depreciation of the dollar. The dollar’s strength on Friday was driven by investors buying back into the greenback and taking their profits from earlier positions.
In today’s trading the pound has strengthened back over the US dollar, sitting comfortably over a cent up on the day, having reached a high of 1.4625. Improved risk appetite has seen investors’ demand for the pound increase and the dollar has been heavily sold as investors speculate that the Fed’s plans will see the greenback heavily over supplied. Later today Nationwide Housing Prices are announced in the UK, whilst in the US Existing Home Sales data is announced. There is also a speech from Treasury Secretary Geithner today and President Obama is expected to announce details of a three-part strategy to rid the US financial system of toxic assets.
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