Sterling continues to struggle | Smart Daily Currency Note
GBP/USD – 1.4944
Sterling started Tuesday badly, weakening against the majority of its trading partners (falling to another yearly low against the US dollar and levels last seen in 2010), due to unexpectedly poor manufacturing and industrial output data showing further contraction. The trade deficit was narrower than expected but the house price balance declined. It was also reported that the future Bank of England (BoE) Governor (currently the Bank of Canada Governor) met with a UK top treasury civil servant to discuss potential changes in UK’s monetary policy. A GDP estimate released from the National Institute of Economic and Social Research (NIESR) suggested the UK contracted by 0.1% in February whist revising January’s estimate up to 0.0% from -0.2%. Sterling regained some of its losses throughout the rest of the day, but, expect the markets to remain extremely nervous ahead of next weeks BoE meeting minutes being released and the Chancellors Budget announcement. We have a quiet rest of the week in terms of UK data released, call in now for the latest live rates and updates.
The US dollar had a mixed day yesterday, benefiting against sterling following the release of very weak manufacturing figures in the UK which helped push the US dollar to a two and a half year high. The afternoon, however, saw rates climb back up to the levels seen in the morning to end trading in London back up around 1.49. Conversely, the US dollar did poorly against the euro during yesterday afternoon, before recovering, with the euro dollar rate ending the day in London at just above 1.3. This afternoon sees the release of two key retail statistics, both of which are expected to bring positive news – which would give further indication of a continued US economic recovery and give greater support to the US dollars recent strength. Call in for the latest rates and up to date market information.