CurrencyIndex.co.uk

Foreign Currency Exchange Specialists

Wednesday, 3 June 2009

But sterling weakens, is the upward run finished for now?

Wednesday afternoon has seen Euro and Dollar rates start to come back down - have we seen the best exchange rates for now?

- Sterling fell sharply against the dollar on Wednesday, erasing earlier gains after Asian monetary officials said they would keep buying US Bonds

- Weak American employment and services sector data hurt the outlook for global economy hitting riskier assets such as sterling

- The deteriorating market sentiment prompted investors to dismiss earlier strong UK services sector data, as UK shares tumbled 2.3%

- A worsening political crisis for Gordon Brown also helped take some shine from sterling

- Profit taking, "Sterling has had a very good run recently and people are also thinking it may be prudent to take some profit off the table now,"

- Investors are nervous ahead of the Bank of England and the European Central Bank policy decisions, as well as key US jobs data on Friday

- Hazel Blears' decision to step down follows Tuesday's resignation by Jacqui Smith. Both are seen as undermining Brown's authority on the eve of European and local elections

- Investors will also be looking to see whether there are any further announcements on quantitative easing on Thursday

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