Sterling – are we seeing the calm before the storm? | Smart Daily Currency Note
GBP/USD – 1.5252
Sterling had a good day yesterday strengthening against all except one of its 16 major trading partners. This was better than to be expected following the ratings downgrade by Fitch on Friday (from AAA to AA+) due to weak economic performance. The downgrade did not come as a shock although it puts further focus on the GDP data released later this week, with economists largely hopeful that the UK will marginally avoid a triple dip recession. Confidence was further buoyed by news that the Chancellor is likely to extend the Bank of England’s Funding for Lending scheme aimed to boost loans for small businesses and consumers. Today we have a quiet day for GBP data release, with only Public Sector Net Borrowing and CBI Industrial Order Expectations. The critical day this week is Thursday when the growth figures for the first quarter will be released – we should expect increased volatility in the second half of this week. Call now for the latest news.
The start of the week saw the release of US housing sector reports, which unexpectedly observed a drop in home sales through March after economist’s estimates that real estate sales would reach their highest levels since 2009 fell distinctly short. Despite this, the US dollar prices were not strongly affected although the US dollar did have a mixed day against major pairings. Further home sales figures will paint a clearer picture later today, though this certainly feels like a soft patch in economic data emanating from America, in contrast to the positive sentiment in the first few months of this year. Talk to your trader today to see whether this marks a turning point in price levels for the US Dollar.