Sterling under pressure and no relief likely today | Smart Daily Currency Note
GBP/USD – 1.4904
Yesterday came in two halves for sterling, with a strong dollar driving the US dollar rate down to levels not seen since the summer of 2010 in the morning, but recovering through the afternoon to undo most of the losses by the close of trading in London. Today sees the release of monthly manufacturing production figures, a key indicator of UK economic health. The figures are expected to show a sharp drop in growth rates but remain in positive. Given the recent Purchasing Manger Index figures from the manufacturing sector, it would seem optimistic to hope for a good outcome for sterling. Trade balance figures released at the same time look set to show that the imbalance between imports and exports remains on a par with last month, so short of a big surprise, market reaction to this data is likely to be muted. Call us now for the news and live prices.
While there was little data released yesterday, the market for US dollars was not so quiet, and the dollar struggled to hold its own later on in the day. The result was a volatile day, notably undoing early gains to slip back over the 1.30 mark against the euro. Markets are full of chatter as to when the stimulus programs will be brought to an end, a question which the Federal Reserve Chairman failed to clearly answer. Today’s Federal Budget Balance data takes on more importance than usual in light of the potential impact of sequester spending cuts aimed at returning to a surplus – unlikely any time soon given the forecast deficit of 220 billion dollars. Call in now for a market update and a live quote.