Smart Daily Currency Note | No “back to work blues” for the currency markets
GBP/USD – 1.6030
Sterling had a difficult week last week, initially gaining ground but then struggling in the second half of the week. Against the US dollar on Friday it fell to 1.6020 having gained and then lost over three cents during the course of the week. Weaker than expected Services Purchasing Managers Index (PMI) data released on Friday, the first contraction in 2 years when a slight expansion had been expected, likely drove the decline given how significant the services sector is to the UK economy. Furthermore, more weak data was released in the form of the supply of money and the net lending to individuals. We are likely to see some volatility in the back end of the week as three important releases are made. On Thursday, following the Bank of England meeting, an announcement on quantitative easing and interest rates will be made. No change is expected in either. On Friday we will see the release of monthly Manufacturing data which is forecast to show a swing to the positive for the first time in four months, if so, this could well drive some value into the struggling pound. Get in touch now for an up to the second exchange rate.
The US dollar started Friday in the ascendency, strengthening against all of its major peers following the release of the Federal Open Market Committee meeting minutes on Thursday. The minutes revealed that several members suggested that they wanted to tighten monetary policy at some point in 2013 as they feel the effectiveness of continued loose monetary policy dwindles. In fact there is a fear that extending it could be inflationary. The US dollar struggled to keep up this momentum in the afternoon following data showing the overall unemployment rate rose from 7.7% to 7.8%. Furthermore, the highly influential Non-farm payrolls data came out slightly better than expected; but, disappointed many traders who were hoping for a big jump following Thursday’s positive payrolls release. In other news, Services Manufacturing PMI came out much better than expected. It is a fairly quiet on the data front this week with Trade balance data released and the weekly release of the change in the number of people claiming unemployment benefits is also announced. The dollar is performing well following a poor start to the week, call in now to see if the trend will continue.
Get in touch now for a live price and to see if the US can avoid tumbling off the so-called fiscal cliff. For individual requirements, visit the SmartCurrencyExchange.com website and for companies visit the SmartCurrencyBusiness.com website