In Wednesday's trading the pound strengthened over the US dollar by 2.32 cents to close the day's trading at the 1.4268 level. Earlier in the day the pound had traded as low as 1.3849 after it was announced that unemployment in the UK had exceeded 2 million and investors took a poor view of the health of the UK economy. It was also reported that the number of unemployed claiming benefits shot up at the record rate of 138,400. However, the pound’s fortunes were reversed after it was announced in the US that the Fed would engage in quantitative easing in order to stimulate the economy. Using $300 billion, the Fed plans to buy long-dated treasuries in a bit to flood the credit market with dollars and encourage lending to the private sector. It will also use over $1 trillion to buy securities and debt from mortgage finance agencies. The dollar weakened as investors see the ever expanding US budget deficit as having long term negative effects.
In today's trading the pound has continued to strengthen on continued dollar selling after yesterday's announcement. The CBI Industrial Trends Survey due in the UK today will reveal expert projections on manufacturing costs, exports, and prices, while the BoE will report on the current sterling in circulation. In the US, the Philadelphia Fed Manufacturing Survey will be published, along with initial and continuing unemployment claims data.
No comments:
Post a Comment