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Posted July 3rd, 2013 by Charles Purdy

Sterling continues to lose ground against the dollar | Smart Daily Currency Note

GBP/EUR – 1.1668

A strong construction sector did not make for a strong sterling yesterday. While Construction Purchase Manager Index (PMI) figures were the best they have been since May 2012, sterling still lost ground against the US dollar – pushing as low as 1.5150 against a bright US dollar in the early afternoon. Today the big news is the last of the PMI figures – Services which make up 75% of the UK’s GDP and has shown consistent growth, month on month, since February. The consensus expect slightly less growth than last month, but positive news nonetheless. If the release beats expectations – given the importance for the UK’s economy as a whole – expect sterling to strengthen. That being said, you can expect the market as a whole to remain nervous in anticipation of the Bank of England monetary policy meeting on Thursday where we will see Mark Carneys’ first rate decision as Governor. Not only that, but on the same day we will have the ECB’s decision on interest rates and decreased liquidity due to the US markets being shut in accordance to the 4th July Bank Holiday. Call your trader this morning for the very latest developments.

The euro was soft yesterday in a day that saw unemployment figures revised up to new all-time highs of 12.2%. While it held its own against a weak sterling during the course of the day only losing ground after close of business here, a dominant US dollar pushed it below 1.30, remaining below this key psychological level as we enter today. Services PMI figures are released in Europe today, with Spain and Italy releasing theirs just ahead of the general release for the Eurozone. In contrast to the UK, the outlook is not great – with the expectation being another month of contraction. Get in touch with your trader today for up to the second rates. 

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