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Posted February 28th, 2013 by Charles Purdy

Markets calm, how long will it last? | Smart Daily Currency Note

GBP/USD – 1.5158

Sterling, had a mixed day yesterday, starting off on the front foot by making gains against the majority of its trading partners before losing ground in the afternoon. Data released yesterday showed the first revision to the UK’s fourth quarter GDP figures which fleshed out the details of the 0.3% contraction seen during that period – with exports and imports both falling sharply. Sterling also enjoyed a temporary lift after one of Monetary Policy Committee (MPC) members from the Bank of England (BoE) quashed the idea of negative interest rates being introduced. With little data expected to be released from the UK today, the markets will most likely look elsewhere for influence. Call now for the latest updates on sterling.

The US dollar had a mixed day yesterday struggling in the morning but regained some of its losses in the afternoon. Positive Core Durable Goods Orders, rising by the highest rate in a year, and Pending Home Sales data both came out much better than expected. In his testimony the Federal Chairman suggested the benefits outweighed the negative with regards to the central bank’s asset purchasing program. The testimony gave no signs that the Fed may slow or even stop monetary easing, in spite of recent murmurings that the central bank may look to taper asset purchases. The Chairman also maintained pressure on Congress to act to prevent the USD 1.2 trillion of spending cuts that are due to start taking effect from March 1st reminding the Committee of the Congressional Budget Office’s forecast that US growth will be adversely affected by around -0.6% this year, and the labour market will lose 750k jobs, if the spending cuts are maintained throughout the whole year. Today we have Preliminary fourth quarter GDP data – expected to show 0.5% annualised growth – and the weekly unemployment claims coming out of the states. Call in now for the latest news and live rates.

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