It was a fairly noneventful day of trading between the US dollar and British pound yesterday.

With little new data coming in and subsequent light trading volume, this pair traded a very narrow 1.6100/1.6160 range. This morning it opened higher, towards the top of yesterday’s range.

Forex Update: US Dollar / British Pound

Of the little data that was released yesterday, much of it was better than expected, largely down to pre VAT rise purchases. RICS housing prices remained more buoyant than expected too.

The main event to keep and eye on as we move further into the week will be the Bank of England monetary policy decision, so subdued trading will likely continue as investors await that news.

Although MPC minutes released last month show a mild upward revision in voter sentiment, markets do not expect the central bank to change interest rates or QE. The market is expecting a 25% or so chance of a rate hike on Thursday.

British Pound Sterling (GBP) in US Dollar (USD): 1 GBP = 1.6056 USD (+0.00460, +0.287%)

With the prospect of interest rate rises in the UK being fuelled by comments in national newspapers by Bank of England member Martin Weale, the British pound traded up against the US dollar yesterday.

There was more cautious optimism as the Pound broke through the psychological barrier of 1.600 against the greenback.

Exchange Rate Update: US Dollar v GB Pound

More analysis of the GDP drop in the fourth quarter of last year has pointed to the possibility of the spectacularly bad weather in the country accounting for as much as 1% of the fall. This in turn would mean that the perceived slowdown may not be as bad as previously feared.

In news which may annoy several politicians, especially those currently occupying number 10 and 11 Downing Street, the National Institute for Economic and Social Research has analysed the proposed drastic cuts by the coalition government, and has suggested that they delay their implementation. This, coupled with a consistent fall in house prices in the country could see the dollar bounce back against this strong run from the pound.

Finally, with unrest in Egypt continuing unabated, many analysts see the dollar as a safe haven in the global markets exchange rate markets.

- British Pound US Dollar (GBPUSD) exchange rate currently trading at: 1 GBP = 1.4986 USD (-0.00940, -0.623%)

The pound fell today amid fears of a possible recession looming in Europe. It seems investors believe the US isn’t the only economy with troubling financial woes. Not a big change though, as sterling is only trading slightly lower, around 1.5050. As unemployment numbers come out Friday, little is likely to change before then.

British Pound US Dollar (GBPUSD) Exchange Rate

The dollar strengthened today as investors found a safe haven there from riskier equities markets, and equity markets around the globe took a tumble lower. The Dow Jones dropped 2.7% to close back below the all-important 10,000-point level. Expect to see investors get bolder once the quarter ends and conditions are more certain.

Today’s other Forex news:

US Dollar Euro (USDEUR)
As the ECB’s 12-month loan program comes to an end, investors are wary of the results and the Euro fell out of favor in recent trading, dropping as low as $1.22. Now Eurozone banks loans are coming due – to the tune of €442 billion – all of which were made at low rates as part of the ECB’s efforts to boost liquidity.

British Pound Euro (GBPEUR)
Sterling marked a new 19-month high yesterday against the euro, continuing to rally as investors grew cautious with upcoming bank repayments to the ECB yet to shake out this week. The pound faced downward pressure with the market fearful of how the end of the ECB’s 12-month loans may impact the funding situation in Southern Europe.

We will continue to monitor the British Pound US Dollar (GBPUSD) exchange rate throughout the day.

- British Pound US Dollar (GBPUSD) exchange rate currently trading at: 1 GBP = 1.5108 USD (+0.00690, +0.459%)

The pound gained steadily against the dollar on Friday after bad reports on the US economy, closing the day Friday over $1.50. First quarter US GDP growth was unexpectedly revised down from 3.0% to 2.7%. In light of this lowering, the Fed may try to keep interest rates low, which will put broad downward pressure on the dollar.

British Pound US Dollar (GBPUSD) Exchange Rate

In Monday trading the pound is continuing to trade above $1.50 with the G20 offering a positive take on the Budget, but it might be hard to sustain trading at about $1.50 levels. In the absence of positive data on the US macroeconomic situation, traders could become more risk-averse, in which case the pound might see little gains.

Today’s other Forex news:

US Dollar Euro (USDEUR)
The Euro had a good week of trading against the dollar, gaining for the third consecutive day to close at a one-week high. While Europe has debt issues, the US has its own economic strength issues, and now that focus is shifting to concerns about the US economic recovery, the dollar is losing ground to the Euro.

British Pound Euro (GBPEUR)
The pound was able to maintain trading at prices near its 18-month high in trading on Friday as confidence in the UK’s new budget buoys hopes for the future. The Budget is expected to set the UK apart from other debt-laden European countries and revive interest in the pound.

We will continue to monitor the British Pound US Dollar (GBPUSD) exchange rate throughout the day.

- British Pound US Dollar (GBPUSD) exchange rate currently trading at: 1 GBP = 1.4985 USD (+0.00220, +0.147%)

The pound is continuing to appreciate against the dollar in today’s trading session, spurred on by positive comments from a ratings agency and hints of an early hike in interest rates from BoE’s monetary policy meeting minutes, though there is some concern that a rise in interest rates could negatively affect the UK’s economy in the long-run.

British Pound US Dollar (GBPUSD) Exchange Rate

The pound found more support in an announcement from Moody’s that said Britain will retain its triple-A credit rating if it implements its more fiscally conservative budget as discussed in the meeting. But $1.50 is also a formidable resistance level that could prove tough to rise above. It is an obvious point for profit-taking and may take a lot of momentum to break through.

Today’s other Forex news:

US Dollar Euro (USDEUR)
The Euro slipped in early trading but recovered to close the day above $1.23 against the dollar. The dollar was took a hit on news of a weak housing market in the US. Sales of US homes fell to a record-low in May, lower than forecasted, causing many investors to question their assumptions about the US recovery.

British Pound Euro (GBPEUR)
The pound hit an 18-month high against the euro yesterday following a decision to raise interest rates during the BoE’s monitary policy meeting two weeks ago. The decision contributed to the sterling’s upswing to 1.2150, but how much upside potential remains?

We will continue to monitor the British Pound US Dollar (GBPUSD) exchange rate throughout the day.

- British Pound US Dollar (GBPUSD) exchange rate currently trading at: 1 GBP = 1.4473 USD (+0.00890, +0.619%)

The Eurozone currency enjoyed the best of the Euro US Dollar (EURUSD) Exchange Rate yesterday, mainly due to people taking profits after it hit its worst mark against the greenback for four years. The increase wasn’t huge, however, as traders are still wondering about the potential knock-on effect of the debt levels in several countries, including Hungary.

British Pound US Dollar (GBPUSD) Exchange Rate

A new set of bond sales by Spain, Portugal and Italy this week should see how investor demand is faring in the wake of the proposed austerity packages from different Eurozone members. It will be the first bond issue since Spain lost its AAA status.

Today’s other Forex news:

US Dollar Japanese Yen (USDJPY)
Japan’s new Prime Minister caused a lot of unhappiness for traders following the US Dollar Japanese Yen (USDJPY) Exchange Rate yesterday, but it was what he didn’t say that mattered. When he worked as Finance Minister, the PM was extremely yen-negative, but he has made no such remarks yet during his brief stint.

Euro US Dollar (EURUSD)
The Eurozone currency enjoyed the best of the Euro US Dollar (EURUSD) Exchange Rate yesterday, mainly due to people taking profits after it hit its worst mark against the greenback for four years. The increase wasn’t huge, however, as traders are still wondering about the potential knock-on effect of the debt levels in several countries, including Hungary.

- British Pound US Dollar (GBPUSD) exchange rate currently trading at: 1 GBP = 1.4675 USD (+0.00320, +0.218%)

The pound has been having the better of the British Pound US Dollar (GBPUSD) Exchange Rate over the last couple of weeks, but fell sharply in early trading yesterday. News of Prudential’s decision regarding the purchase of AIG’s Asian unit helped the British currency pair its losses and close the gap equal again at the end of trading.

British Pound US Dollar (GBPUSD) Exchange Rate

Tomorrow’s US employment numbers will have a big influence on the relationship between the two currencies, especially with the lack of UK financial information before the mid-June budget.

Today’s other Forex news:

US Dollar Japanese Yen (USDJPY)
The greenback has been strengthening its position in the US Dollar Japanese Yen (USDJPY) Exchange Rate of late, with hopes of further economic recovery. Both US stocks and other investments strengthened yesterday after news from the National Association of Realtors suggested that home sales rose as much as 6% in April – much higher than analysts had predicted.

Euro US Dollar (EURUSD)
It’s likely that the Eurozone currency will enjoy the better of the Euro US Dollar (EURUSD) Exchange Rate today, as Greece has made an early announcement regarding the prospective sell-off of under performing government-owned assets. This could certainly boost the Euro in the short term against the dollar.

We will continue with updates of the British Pound US Dollar (GBPUSD) Exchange Rate throughout the day.

- British Pound US Dollar (GBPUSD) exchange rate currently trading at: 1 GBP = 1.4471 USD -0.00730 (-0.502%)

British Pound US Dollar (GBPUSD) Exchange Rate

The dollar will be strengthened by the continuing uncertainty in the Middle East and Asia. Investors are continuing to move away from risky assets and towards safety, including the US Dollar and gold. In early trading, sterling was down sharply as the greenback took advantage of its status as the go-to world currency in a storm.

In the UK, the new Chancellor George Osbourne is desperately trying to calm the markets after the embarrassing news of his second-in-command stepping down after being implicated in a fresh expenses scandal, days after taking office. He has underlined the Government’s ‘focus’ on reducing the deficit, but the pound may continue to take a little more damage over the short term.

Today’s other Forex news:

US Dollar Japanese Yen (USDJPY)
The threat from Europe’s debt crisis caused the Yen to strengthen its position in the US Dollar Japanese Yen (USDJPY) exchange rate, even though the political uncertainty in Japan may pose its own problems in the short or medium term.

Euro US Dollar (EURUSD)
After being severely weakened in the Euro US Dollar (EURUSD) exchange rate over the past few weeks, the common currency scarcely needed any further bad news – however this weekend delivered it. Spain’s AAA rating is now history, and France’s Budget Minister has stated on the record that they may have problems maintaining theirs – even though they are committed to cutting their deficit too.