United States Dollar: The dollar weakened slightly this morning after a string of positive news flows from Europe (see below). The story wasn’t as positive in the UK however, with continued talk of the possibility of a hung parliament in the upcoming elections. The Confederation of British Industry (CBI) has stated that the Government and Alistair Darling must use the final budget before the election to make efforts to slash the deficit and improve Britain’s long term finances. Many note however, that this is unlikely, as Labour would not want to “rock the boat” and lose votes before May. This is likely to subdue any kind of rally for the pound. Last week was a volatile one for sterling, trading as low as 1.4785 on Monday 1st March, up to levels above 1.5160 on Friday. Despite the persistent talk of election worries, the pound crawls higher, and we open at 1.5180.
- I expect a range today in the GBP/USD rate of 1.5100 to 1.5275
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