Your essential source of information, analysis and forecasts on Sterling (UK pound) Sterling home Currency markets home
Please click on the links below for details of our services. If you find the pages valuable, please pass the details on to your friends and colleagues.
Buy your holiday and business currency - Buy online securely with extra convenience and get better currency rates than at the banks.
Overseas payments/transfers - Companies and individuals, save money and get better rates for all your overseas currency payments and transfers.
Global daily currency analysis - Daily analysis of all the major currencies.
Global currency and Treasury guide - The essential guide to global currency management.
Get independent market advice - Professional consultancy services to meet your individual needs.
Sterling/dollar analysis and forecasts 1st July 2008
Bank of England difficulties (Please click here for Sterling/Euro) Please add this page to your list of favourites
Market analysis
The UK economy will continue to weaken in the short term and there is the risk of a much sharper downturn given major pressure on the housing sector. The Bank of England will face pressure to cut interest rates on growth grounds, but the central bank will also face increase a sharp increase in inflation which will make it very difficult to cut rates in the short term.
The UK currency will, therefore, continue to secure a significant short-term yield advantage. Sterling still looks substantially overvalued on a medium-term view. In the short term, there will still be important protection from underlying dollar weakness, but the UK currency looks to be at unsustainable levels near the 2.00 level.
Risk factors:
Further dollar vulnerability would support the UK currency.
Persistent housing weakness would be very damaging for Sterling
Credit-related losses would also tend to undermine Sterling
Central bank reserve diversification into the UK would support the currency.
Forecasts:
| Currency | Spot (01-07) | 1-month forecast | 3-month forecast | 6-month forecast | 12-month forecast |
| GBP/US$ | 1.9960 | 1.9480 | 1.9340 | 1.9100 | 1.8060 |
Why not upgrade to Global daily currency analysis - and receive full daily analysis of all the major currencies.