By Alex Ellis

Sterling has continually suffered as rates have been plummeting over the last few weeks, a lot of this is due to the fact that there is increased concern regarding the possibility of QE2 as well as the prospect of the budget cuts on the 20th October 2010.

On Thursday at 11:00 the Bank of England’s interest rate decision is due and if this were to show an increase rate hike then we would expect sterling exchange rates to follow suit and regain some of the recent losses. In my opinion it is more likely that the Bank of England will keep rates on hold as the economy is not yet in a stable enough position to raise interest rates. I think that if we do see any raises it will be in the beginning of next year once the budget cuts have been in place for some time.

In US news, Ben Bernanke recently warned that the US faces serious long-term fiscal challenges and these could threaten the nations long term future. ADP employment change is due today at 13:15 and if we were to see a negative release then we would expect the Dollar to weaken as a result.

For any currency requirements use Currency Line to contact an experienced currency broker who can help to ensure that you are well informed before committing to any trade.