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The dollar's worrying silence

Article Abstract:

The US dollar has been stable in relation to the German mark from April 1998 to Aug 1998. Pound sterling has tended to follow the US dollar in relation to the mark, and the pound also has an impact on inflation. A drop in the value of the pound means that interest rates are more likely to be raised to control inflation. The US trade deficit is increasing and this may mean that the dollar will drop in value, according to some analysts. Others see a possible rise in the dollar since US interest rates are likely to be raised more than German rates.

Administration of General Economic Programs, Exchange Rates, Foreign Exchange & Reserves Policy, Dollar (United States)

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Short-changed by short sterling

Article Abstract:

The short sterling futures market foresees a rise in UK base rates to 6.5% by Dec 1996, but such predictions are not always accurate. The market forecast a rate of 9% by May 1996, but rates are 3% below that level. Forecasters may believe that rates will return to average levels but this method does not work if there has been a significant shift. Rates will stay low if inflation stays low, and forecasting will be easier if rates are less volatile.

United Kingdom

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