Sterling has bad week versus euro, USD

Sterling has bad week versus euro, USD

Story link: Sterling has bad week versus euro, USD

TAGS:

Sterling seemed ready to weaken the most against the euro this week as it has in over two years and to decline the most in a week versus the US dollar as it has in a year and a half, making it look more and more likely that the Bank of England will cut interest rates soon, possibly as early as when its Monetary Policy Committee meets in December.

Among the reports pointing to a UK rate cut are government data showing that retail sales were down by 0.1 percent in October, for the first decline in nine months, as well as a report from Nationwide Building Society predicting that the average price for a house in the UK will remain static next year after recent gains of 9.7 percent.

In trade just after midday in New York, the pound was trading at €1.3992 to the pound while the US dollar was at $2.0524 to the pound and the yen traded at ¥228.0830 in relation to sterling.

At the same time, the US dollar traded at $1.4688 to the euro while it was at ¥111.1300 in relation to the yen after US Treasury Secretary Henry Paulson said during a trip to Africa that the dollar will come back from its recent weakness, a reiteration of the “strong dollar� policy that US Treasury secretaries have held to for more than a decade.

Still, the US dollar has declined 11 percent so far this year and some analysts have characterized Mr. Paulson’s remarks as being what European and Canadian policy makers “want to hear�, and that his comments will likely have little lasting effect on currency markets.