Will sterling continue its downward trend? | Smart Daily Currency Note
GBP/USD – 1.5097
Sterling had a more positive day on Friday, recovering a little of the ground lost earlier in the week and indeed some analysts are starting to suggest the Bank of England may be looking to slowly move away from their easing cycle, which could help sterling retrace it’s decline from earlier this year. Fresh evidence emerged on Friday that the UK housing market recovery is underway with mortgage approvals rising by 2.4% through April, though this remains below the levels seen before 2008. The report said that the government’s Funding for Lending scheme continues to support the market – particularly for first time buyers. This coming week will be relatively quiet for significant UK economic releases; with only data showing the net lending to individual and realised sales figures expected to be released alongside comments from several members of the Bank of England. Perhaps no news will be good news and sterling can bounce back from recent lows as speculation increases as to tighter monetary policy. Contact your trader to find out whether sterling can find momentum.
The US dollar found further strength before the bank holiday following news that durable goods orders increased more than forecast as the world’s largest economy continues on the road to recovery. The US dollar could well continue it’s strong performance into this week and beyond as speculation increases about the potential for the Federal Reserve to taper off their quantitative easing programme. Historically, an improving labour market was the catalyst for the central bank ending programme of monetary easing and with positive jobless claims data having emerged last Wednesday many believe the Federal Reserve will start to think about slowing the pace of asset purchasing in the near future. On the data front this week, Tuesday sees the release of monthly consumer confidence data which will give an insight into how the US retail sector is recovering. We are likely to see a degree of volatility on Thursday in response to a host of data being released including the change in the number of people claiming unemployment related benefits, pending home sales figures and preliminary quarterly GDP data which is currently expected to show that the worlds largest economy grew by 2.5%. Call in now for a live rate with Smart and to keep up to date as the week progresses.