Sterling Falls against the Dollar as the U.S economy is seen a better light

The British Pound fell on Monday, extending losses triggered last week by the Bank of England's surprise decision to expand quantitative easing, which raised expectations for a dovish tone in the central bank's Inflation Report due on Wednesday. That was in sharp contrast to the dollar, which held most of its gains made on Friday after data showed U.S. job losses slowed last month, boosting speculation for higher U.S. rates. The Sterling was still reeling from the BoE's decision to expand its asset buying programme beyond its previous limit to 175 billion pounds from 125 billion pounds, after the central bank refrained from expanding the total at its July meeting. "The Inflation Report is set up to explain the BoE's latest move, so it will be key for the pound," said Christian Lawrence, currency strategist at RBC Capital Markets. The GBP/USD is currently trading at $1.6455 as of 8:51am, London Time.

The euro is likely to weaken to 130 yen by year-end after the 16-nation currency failed to rise through so-called resistance at 141.04 yen, according to Deutsche Bank AG, citing trading patterns. “The European currency has strengthened too quickly,” said Koji Fukaya, a senior currency strategist at the Tokyo unit of Deutsche Bank, the world’s biggest foreign-exchange trader. “It will struggle to break 140 yen.” Europe’s single-currency will probably decline to 135 yen by the end of September, according to a Bloomberg News survey of economists and analysts. The estimate puts a heavier weighting on more recent forecasts. The EUR/JPY is currently trading at 137.20 as of 9:02am, London Time.

President Barack Obama will defend his efforts to overhaul the U.S. health-care system at a town hall in Portsmouth, New Hampshire, today after a series of protests met his fellow Democrats in recent days. Democratic members of the House and Senate who have returned to their home districts have encountered protesters holding signs and screaming slogans such as “just say no” to the party’s health-care plan. The Democratic National Committee has accused Republicans of orchestrating the disruptions.

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