US growth stumbles, will this help sterling? | Smart Daily Currency Note
GBP/USD – 1.5828
Sterling had a mixed day yesterday amid a number of positive developments released from the UK; but, still fell to 1.1630 against the euro at one stage. Mortgage approvals increased by more than forecast to the highest level since January 2012 showing that Bank of England scheme may have started to boost the "flow of credit" and support to the economy. Net Consumer Credit also expanded over the December period which was the largest advance in two years. The recent statements from the incoming Bank of England Governor implies there is scope to do more to support the economy with different types of stimulus and this is keeping sterling pressured, in addition to the uncertainty of Britain staying in the European Union. Today is a quiet one for data out of the UK, all eyes are will be on Fridays release of Manufacturing data. Markets will look elsewhere for influence today however, so call in now for the latest news and updates.
Yesterday was a difficult day for the US dollar, as a combination of increasing global economic confidence and considerably worse than expected US GDP data dampened demand for the traditionally safe-haven asset. News that fourth quarter GDP had shown a contraction of 0.1% – dramatically below last quarter’s 3.1% growth and predictions of 1.1% growth – saw the dollar lose significant ground versus its major peers. Continued risk appetite from the Eurozone saw the US currency fall to its lowest level since November 2011 versus the euro, whilst also paring its recent gains versus the Japanese yen. Yesterday also saw the release of key employment data which came out better than forecast and indicates that Fridays more influential reading will also be positive, however it was not enough to restore full confidence in the US economy as expectations remain rife that the Federal reserve is likely to commit to further monetary easing. Today sees the release of the weekly unemployment claims, so call in now for the latest news and to get a live price from your trader.
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