Throughout Wednesday rates fell from the $1.60 mark we saw at the start of the week and reached a low of $1.5845 in the afternoon. The decline was down to dollar strength rather than Sterling weakness, the Fed minutes and a disappointing Spanish bond auction led investors to leave the single currency (Euro) and head back to the safe haven status of the U.S dollar.
The minutes from the Federal Reserve’s March meeting provided an insight into how the policy-setting committee members voted. Only two of the ten members voted in favour of additional stimulus, which was a surprise considering the speeches made by Chairman Ben Bananke last week pointed towards more money being pumped into the U.S economy.
In regards to sterling, Wednesday’s data release showing services sector growth (for the 15th consecutive month) along with the recent construction and manufacturing improvements have reduced the chance of the UK heading back into a recession and the chances of further QE from the bank of England.
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