Sterling steady at recent highs – is it a good time to buy euros or US dollars? | Smart Daily Currency Note
GBP/USD – 1.5526
Sterling remained steady over the bank-holiday having gone into the weekend on an even keel and having advanced across the board on Friday morning after data showed that the nation’s dominant services sector had in April recorded its strongest rate of growth since last year’s Olympic Games. The Services Purchasing Manager’s Index recorded its highest reading since August and was the fourth monthly consecutive rise. The data has added to signs that the UK’s glacial economic recovery could be gaining pace and will be a relief to the coalition government after it received a drubbing in the UK local council elections. Thursday will see the Bank of England meet for its monetary policy decision. As always, the decision and statement which follows will be watched closely by investors. At present, the general consensus is that the level of asset purchases will remain unchanged as will the central bank interest rate especially following the better than expected data released out of the UK recently. There is a belief that there is less necessity for the central bank to ease, however at the same time the government is under increasing pressure from Europe to take measures to stimulate growth. Talk to your trader for the latest prices leading up to the release.
The US dollar continued to perform well yesterday in the wake of Friday’s surprisingly positive US April jobs data – fuelling optimism the economy may be more resilient than recently feared. Employment picked up more than forecast in April and the jobless rate unexpectedly declined to a four-year low, showing federal budget cuts failed to destabilize the U.S. labour market. Non-Farm payrolls expanded more than expected, with hiring advancing last month even as employers witnessed the onset of planned government spending reductions. However, data released soon after regarding US factory orders revealed a drop through March as a cooling economy slowed demand for mining, metals and military products. Companies are feeling the effects of slowing growth in Europe, Asia and the US, where higher taxes and federal budget cuts have diluted consumer spending, though orders could pick up as employment and demand strengthens. Weekly Unemployment Claims data is due to be released on Thursday where more good news could see further dollar strength, furthermore, several members of the Federal Open Market Committee will be speaking this week and the Federal Reserve Chairman will be expressing his thoughts on Friday. Keep updated with your trader for up to the minute information and price levels until then.
Sterling gains against the US dollar | Smart Daily Currency Note