Sterling slipped back against
the dollar on Thursday ahead of Friday’s meeting at Jackson
Hole. Cable fell sharply in the afternoon and hit a low of $1.5803
after reaching a high of $1.5872 earlier in the day,
On Friday Fed Chairman Ben Bernanke is speaking and there
has been growing speculation that policy makers could opt for another round of stimulus,
which if implemented could see the dollar fall against a number of currencies.
The past week has seen the GBP/USD cross being driven by
events in the states and Thursday saw the dollar claw back some of the ground
it had lost to the pound. In the few
days the U.S dollar has benefited from some positive data releases and it seems
it has lowered the chances of Mr Bernanke and the FED adding to their QE
programme.
With the UK
economy still balanced on a knife edge it is quite possible we could see cable
move back towards $1.56 if UK
data doesn’t improve. With the BoE meeting due to take place next week all eyes
will again be focused on Mervyn King and we will wait to see if there is any
talk of another interest rate cut.
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