pound vs. dollar
Pound, Euro, Yen - not all in synch relative to the dollar it seems...
Feb. 11 (Bloomberg) -- The pound fell against the dollar for the fourth week in a row on speculation the Bank of England may lower interest rates in the first half of this year, widening the yield advantage of the U.S. currency.
The pound dropped 1 percent against the dollar in the week as the central bank left its benchmark rate at 4.5 percent for a sixth month on Feb. 9 and interest-rate futures trading shows some investors have revived bets on lower borrowing costs by the middle of the year amid signs that consumer spending is sputtering.
``The dollar-supporting factors still have an impact such as the economic momentum and the interest rate differential,'' said Bjoern Pietsch, a fund manager at Deutsche Bank AG's DWS Investment GmbH.
Against the dollar, the pound was at $1.7446 late yesterday in London, from $1.7625 on Feb. 3. It was also at 68.22 pence versus the euro from 68.25 pence a week earlier.
The U.S. Federal Reserve has increased rates 14 consecutive times since June 2004 and is expected to raise the federal funds target a quarter percentage point at each of its next two meetings, reaching 5 percent by mid-year.
In the U.K., the central bank pared rates in August to 4.5 percent for the first time in two years. The yield on the interest- rate future maturing in June was 4.5 percent late Friday, down from 4.61 on Feb. 2, its highest this year. The futures contract settles to the three-month London inter-bank offered rate for the pound, which has averaged about 15 basis points more than the benchmark rate for the past decade.
A narrowing interest-rate premium erodes the attraction of U.K. assets compared to those in the U.S.
Pound, Euro, Yen - not all in synch relative to the dollar it seems...
Feb. 11 (Bloomberg) -- The pound fell against the dollar for the fourth week in a row on speculation the Bank of England may lower interest rates in the first half of this year, widening the yield advantage of the U.S. currency.
The pound dropped 1 percent against the dollar in the week as the central bank left its benchmark rate at 4.5 percent for a sixth month on Feb. 9 and interest-rate futures trading shows some investors have revived bets on lower borrowing costs by the middle of the year amid signs that consumer spending is sputtering.
``The dollar-supporting factors still have an impact such as the economic momentum and the interest rate differential,'' said Bjoern Pietsch, a fund manager at Deutsche Bank AG's DWS Investment GmbH.
Against the dollar, the pound was at $1.7446 late yesterday in London, from $1.7625 on Feb. 3. It was also at 68.22 pence versus the euro from 68.25 pence a week earlier.
The U.S. Federal Reserve has increased rates 14 consecutive times since June 2004 and is expected to raise the federal funds target a quarter percentage point at each of its next two meetings, reaching 5 percent by mid-year.
In the U.K., the central bank pared rates in August to 4.5 percent for the first time in two years. The yield on the interest- rate future maturing in June was 4.5 percent late Friday, down from 4.61 on Feb. 2, its highest this year. The futures contract settles to the three-month London inter-bank offered rate for the pound, which has averaged about 15 basis points more than the benchmark rate for the past decade.
A narrowing interest-rate premium erodes the attraction of U.K. assets compared to those in the U.S.
Once the crazies get hold of a nuke, the gloves are off and Guantanamo will look like Disneyland compared to what comes next.
