Sterling still friendless, still losing ground | Smart Daily Currency Note
GBP/USD – 1.5712
January, so far, has been a terrible month for sterling and with limited data out this week to reverse this trend it looks set to continue. It was, as many had anticipated, a difficult morning for sterling on Friday as worse than forecast GDP data saw the currency loose further ground against its major trading peers. News that the British Economy had contracted 0.3% in the fourth quarter of 2012 saw sterling fall to a thirteen month and a five month low versus the euro and US dollar respectively. By early afternoon sterling had reversed most of its losses – recovering to 1.5827 against versus the dollar – although it remained at the lowest level since December 2011 versus its European counterpart. This morning we have opened down and close to 1.17 against the euro and below 1.575 against the US dollar. This week is relatively muted in terms of UK economic data, with the only major release on Friday being that of Manufacturing Purchasing Managers’ Index (PMI). Having seen Manufacturing Production data come out considerably below forecast earlier this month, any contraction is PMI is likely to have a detrimental impact on the already fragile sterling. Call in now for the latest news and to get a live price from your trader.
The US dollar had a fairly muted day on Friday, with little data out, reacting mainly to news from its trading partners – most notably the disappointing British GDP data – rather than anything else. This week looks unlikely to be so calm however with influential data releases every day. Today, of particular note, is Durable Goods data, a key indicator of production followed by home sales data and we also have figures showing the number of homes pending sale. Later in the week, we have consumer confidence data on Tuesday and there is also a raft of employment related data released at the back end of the week, culminating with the highly influential non-farm employment data released on Friday. This is now particularly important given the link that the Federal Open Market Committee (FOMC) have expressly linked labour markets with monetary policy. The FOMC will also be making a statement on Wednesday following its latest decision on Monetary Policy. Furthermore we have preliminary GDP data released which is expected to show the economy grew by 1.3%. Get in touch now for the latest news and live rates.
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