But sterling weakens, is the upward run finished for now?

28 July, 2011


Wednesday afternoon has seen Euro and Dollar rates start to come back down – have we seen the best exchange rates for now?

– Sterling fell sharply against the dollar on Wednesday, erasing earlier gains after Asian monetary officials said they would keep buying US Bonds

– Weak American employment and services sector data hurt the outlook for global economy hitting riskier assets such as sterling

– The deteriorating market sentiment prompted investors to dismiss earlier strong UK services sector data, as UK shares tumbled 2.3%

– A worsening political crisis for Gordon Brown also helped take some shine from sterling

– Profit taking, “Sterling has had a very good run recently and people are also thinking it may be prudent to take some profit off the table now,”

– Investors are nervous ahead of the Bank of England and the European Central Bank policy decisions, as well as key US jobs data on Friday

– Hazel Blears’ decision to step down follows Tuesday’s resignation by Jacqui Smith. Both are seen as undermining Brown’s authority on the eve of European and local elections

– Investors will also be looking to see whether there are any further announcements on quantitative easing on Thursday