$ breaches that psychological barrier!

Guest · 7 Nov 07, 11:41 AM

On ADVFN this morning:

"Pound hits 2.10 usd mark as dollar battered by Cheng comments

LONDON - The pound went above the physchologically important 2.10 mark against the dollar as the US currency continued to face severe pressure.

At 9.28 am GMT, the pound was trading at 2.1010 usd, having hit a high of 2.1025.

"This is the first time the pair (sterling/dollar) has been at these levels since May 1981, but the rally is being driven by dollar weakness as opposed to pound strength," said James Hughes, market analyst at CMC Markets.

The latest bout of dollar selling has been sparked by speculation that China could be set to diversify its reserves away from the dollar given the US currency's current weakness.

This follows comments by vice chairman of China's National People's Congress Cheng Siwei, who said the country's forex regulator will "shift" its foreign exchange holdings, and that China should consider shifting its forex reserves to "stronger" currencies.

"Speculation that the Chinese government may further diversify its currency reserves is being seen as largely responsible for this move (in the dollar)," Hughes said.

He added that the pound has gained some additional support from the Nationwide UK consumer confidence report released overnight, which showed confidence dipped only marginally in October despite the recent financial market turmoil.

"The consumer confidence figures released overnight certainly didn't reflect any noticeable fall-out from the credit squeeze, so again this could well help keep sterling cash yields looking attractive for some time yet," he said.

The Bank of England's Monetary Policy Committee begins its monthly two-day meeting today, with the decision scheduled for tomorrow. Though its next move on interest rates is set to be a cut, it is expected to hold fire for the time being, given that UK data have not yet suggested too much softening in the economy. "

DIBBadmin · 7 Nov 07, 11:41 AM

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7 Nov 07, 11:41 AM	#1
	7 Nov 07, 11:41 AM Guest Guest
Guest Guest	$ breaches that psychological barrier! On ADVFN this morning: "Pound hits 2.10 usd mark as dollar battered by Cheng comments LONDON - The pound went above the physchologically important 2.10 mark against the dollar as the US currency continued to face severe pressure. At 9.28 am GMT, the pound was trading at 2.1010 usd, having hit a high of 2.1025. "This is the first time the pair (sterling/dollar) has been at these levels since May 1981, but the rally is being driven by dollar weakness as opposed to pound strength," said James Hughes, market analyst at CMC Markets. The latest bout of dollar selling has been sparked by speculation that China could be set to diversify its reserves away from the dollar given the US currency's current weakness. This follows comments by vice chairman of China's National People's Congress Cheng Siwei, who said the country's forex regulator will "shift" its foreign exchange holdings, and that China should consider shifting its forex reserves to "stronger" currencies. "Speculation that the Chinese government may further diversify its currency reserves is being seen as largely responsible for this move (in the dollar)," Hughes said. He added that the pound has gained some additional support from the Nationwide UK consumer confidence report released overnight, which showed confidence dipped only marginally in October despite the recent financial market turmoil. "The consumer confidence figures released overnight certainly didn't reflect any noticeable fall-out from the credit squeeze, so again this could well help keep sterling cash yields looking attractive for some time yet," he said. The Bank of England's Monetary Policy Committee begins its monthly two-day meeting today, with the decision scheduled for tomorrow. Though its next move on interest rates is set to be a cut, it is expected to hold fire for the time being, given that UK data have not yet suggested too much softening in the economy. "

7 Nov 07, 11:41 AM	#2
	7 Nov 07, 11:41 AM DIBBadmin Imagineer
DIBBadmin Imagineer Join Date: Mar 02	This thread has been automatically closed as it has not been posted on in 365 days.