Sterling steady – how long will it last? | Smart Daily Currency Note
GBP/USD – 1.5432
Sterling has been trading in a narrow range against the euro and the US dollar since the start of the month but it has been moving rapidly between the two extremes as new data pushes market sentiment one way and then the other. Yesterday the release of UK industrial production showed that in March UK manufacturing had grown and at a faster rate than predicted. On the same day the Bank of England confirmed that it had decided for the tenth month in a row not to extend its quantitative easing measures or change interest rates – this was very much as expected. Alongside this, the British economy expanded at a 0.8 per cent in the three months to the end of April according to estimates by think-tank NIESR; well ahead of the previous reading of 0.3 per cent. However the base for this is growth is the weak level of output in January which has inflated the quarterly rate of growth in both the production sector and the broader economy in the three months to April 2013 as NIESR added that underlying growth is therefore weaker than the headline suggests. Sterling started the week poorly before bouncing back and rising at its fastest rate in two months against the US dollar before losing ground late yesterday. Attention now turns to today’s import and export data and the G7 meetings. Call in now to see how these can affect your currency requirements.
The US dollar surged around lunchtime yesterday as news hit the markets that the number of Americans filing claims for jobless benefits unexpectedly dropped to a five-year low. This corroborated strong US unemployment data last week and was seen as a signal the labour market is strengthening for the long term. Gains were seen across the board against its major pairings, especially against the euro and Japanese yen as applications for unemployment insurance payments decreased to the lowest level since early 2008. Along with the release of the Federal Budget Balance, the Federal Reserve Chairman speaks today and may shed some light on what he anticipates for the US quantitative easing stimulus programme going forward. US dollars regained lost ground yesterday as indicators that the world’s largest economy is on the road to recovery. Call in now for the latest developments before the weekend.
Sterling gains against the US dollar | Smart Daily Currency Note