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Dollar ends on higher note (page 2 of 2)
- Saturday, October 22 - 2005 at 14:34
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At the start of the week, sterling gained against the dollar after weak US data pressured a sell off of the greenback. As the week progressed, sterling weakened against the dollar as data showed that British house prices rose for the first time since June between mid-September and mid-October.
Furthermore, a lower than expected rise in Britain's consumer prices pushed the pound lower against the dollar as it indicated inflation was less of a barrier to a possible interest rate cut in coming months. Consumer prices rose to 2.5 percent against a forecast of 2.7 percent.
Moreover, Bank of England MPC member Rachel Lomax said British inflation is likely to remain above target for the next few months but the outlook for domestic economy was less rosy. Investors are chasing the dollar higher due to expectations of higher US interest rates while market speculation of a rate cut in Britain is eroding the sterling's yield advantage.
However, sterling gained slightly as minutes of the Bank of England's October policy meeting and remarks from a top policymaker suggested a rate cut was unlikely, remaining at 4.5 percent. At the end of the week the UK GDP data was in line with expectation at 0.4 percent.
Next week the market will focus on a number of speakers who will appear before the House of Lords Economic Affairs Committee on Tuesday.
Range for this week: $1.7350-$1.7900
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HSBCSaturday, October 22 - 2005 at 14:34 UAE local time (GMT+4)
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This article was updated on Tue Mar 27 2007.
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