Mixed week for sterling | Smart Daily Currency Note
This week (Last week)
GBP/USD – 1.5242 (GBP/USD – 1.5432)
Sterling started the week slowly with performance negatively affected by a buoyant US dollar and a UK trade report showing the country’s current account position to have continued to deteriorate. By midweek however, the UK currency climbed for the first time in four days as the Governor of the Bank of England’s last inflation report providing an upgraded forecast for the UK economy; indicating that growth could accelerate to 0.5% this quarter. More positivity came as unemployment claims were shown to have fallen, whilst yesterday more forecasts emerged suggesting that the economy will continue to grow at a faster rate coming into the summer than in the first quarter. With reasonable performance against the US dollar and euro going into the weekend, be in touch with your trader to see if sterling can maintain it’s upward momentum despite David Cameron struggling with support from his backbenchers in parliament.
The US dollar fell from close to four-year highs against the Japanese yen and weakened against most of it’s major counterparts yesterday following disappointing unemployment claims data, a contraction in New York state’s manufacturing sector as well as weaker than forecast reports on housing and inflation. This tapered off what has been a particularly strong week for the currency which rose in the wake of good retail sales figures on Monday and expectations the Federal Reserve might scale back their asset purchasing activity, though this now may have proved to be presumptuous as dollar prices weakened following yesterday’s developments, leading many to the conclusion that the Federal Reserve will continue with it’s bond purchasing monetary easing programme for the time being. Watch out for consumer sentiment figures emerging today, though next Wednesday’s slew of reports will be most significant with results from the Federal Open Market Committee’s meeting. Be in touch for prices and reactions as they happen.