USD/GBP

United States Dollar and British Pound: The dollar finished firmer across the board last week against a basket of major currencies, as the fallout from the recent raise in the discount rate continues to dominate attention. EUR/USD traded in a 350 point range before finishing on Friday at 1.3610, which is where we open this morning. The weekend press was littered with talk of potential quicker than expected withdrawal of stimulus packages in the US, which is likely to add support to the dollar this week. Over the Atlantic the story is quite different for the pound, which last week took a battering, trading from a high of 1.5816 on Wednesday 17th, to a low of 1.5356 on Friday 19th, a volatile 460 point move. UK newspapers were increasingly focusing on the possibility of a hung parliament in Britain, which if were to happen, would push back any efforts to tackle the ever prominent budget and fiscal deficits. The margin between the ruling Labour government and the Conservative party has narrowed, and investors are growing increasingly concerned for the economic outlook, and any further press concerning this is likely to weight on the pound in coming weeks. We open at 1.5475 this morning. All quiet on the data front today.

- I expect a range today in the GBP/USD rate of 1.5425 to 1.5550