Monday September 5, 2005 - 09:59:09 GMT
Share This Story
INVESTICA Ltd - www.investica.co.uk
US fears cushion Sterling
Sterling continued to punish the dollar during Friday, although there was some evidence of resistance above 1.8440. Sterling remained firm against the Euro on Friday. Sterling secured fresh gains in early Europe on Monday with a push to 1.8490 as the dollar was sold again and the UK currency challenged levels stronger than 0.68 against the Euro.
UK economic doubts are liable to continue but the focus will stay on the US economy in the short term, especially as it is unlikely that the Bank of England will cut interest rates again this week. Overall, interest rate expectations will remain important in the short term. Sterling will gain support from lower long-term US interest rates and a change in US interest rate expectations, although this should now be reflected in the sharp Sterling rally and it will be more difficult to secure further buying interest unless there is evidence that the Fed will cut rates.
Sterling is also overbought after the strong rally and resistance will become tougher as domestic economic fears will tend to return as the focus starts to shift away from the US. The CIPS index for the services sector weakened to 55.2 in August from 56.3 the previous month and Sterling resistance is likely to become tougher above the 1.85 level against the dollar.
Forex Trading News
Daily Forex Market News
Forex news reports can be found on the forex research
headlines page below. Here you will find real-time forex market news reports
provided by respected contributors of currency trading information. Daily forex
market news, weekly forex research and monthly forex news features can be found
Real-time forex market news reports and features providing
other currency trading information can be accessed by clicking on any of the
headlines below. At the top of the forex blog page you will find the latest
forex trading information. Scroll down the page if you are looking for less
recent currency trading information. Scroll to the bottom of fx blog headlines
and click on the link for past reports on forex. Currency world news reports
from previous years can be found on the left sidebar under "FX Archives."