Sterling still strengthening | Smart Daily Currency Note
GBP/USD – 1.5524
Sterling continued its upward trend on Friday strengthening for a fifth day against both the euro and the US dollar following Thursday’s news the UK had avoided a triple-dip recession and grown slightly beyond expectations. The main data released this week will be the Purchase Manager’s indices (PMI) for the manufacturing, construction and services sectors. At present, the manufacturing and construction sectors are both expected to show their respective sectors are contracting whilst the services sector (which makes up nearly 70% of the UK’s output) is predicted to be show slight expansion. Other data released this week includes the net lending levels to individuals, mortgage approvals figures and house price data. With recent good news, analysts hope for a gradual improvement across the board, but it remains a slim margin whether developments impact positively or negatively on the sterling, so call in to keep abreast of reactions and price levels throughout the week.
The US dollar had an extremely poor day on Friday, falling against the majority of its 16 major peers following data showing US gross domestic product increased by less than expected (2.5% compared to the forecast 3.0%), fuelling worries that the US economy is failing to grow in line with expectations. With GDP data falling short of market estimates and inflation remaining low, this has led to some analysts predicting that the Federal Reserve will continue with its stimulus program for longer than has been recently suggested in order to help support the economy. Hints of when the Federal Bank may look to tighten monetary policy may come from the statement that follows the central banks monetary policy decision on Thursday. Manufacturing and non-Manufacturing PMI figures will also be announced this week alongside a raft of unemployment data which includes the highly influential non – farm pay roll data which will be announced on Friday. Speak to one of your traders for the latest news and to get a live quote.