Sterling has a good week | Smart Daily Currency Note
(Last week) This week
(GBP/USD – 1.5216) GBP/USD – 1.5583
Sterling has sailed upwards against most of its major counterparts this past week as Purchasing Managers Index figures exceeded expectations with the construction, manufacturing and now service sectors all expanding at better rates than expected. Yesterday the Bank of England opted to keep monetary policy on course for the time being with interest rates being left on hold at 0.5% – still a record low, whilst the UK’s asset purchase programme has been left unchanged at 375 billion pounds. The UK currency found significant gains throughout Thursday against its US dollar counterpart as it broke through the 1.5600 level late afternoon to the highest point in 4 months. Indeed, this was the quickest gain against the dollar since 2009 as central bank Governor Mervyn King conducted his last policy meeting amidst a renewed sense of optimism surrounding the economy. With rising house prices sterling could still find support coming into next week – be in touch with all upcoming developments and live prices with your trader.
The US dollar came under pressure this week after disappointing private sector employment figures diluted speculation that the Federal Reserve will taper back its quantitative easing programme this year. Gains in dollar value from strong Consumer Sentiment data from last week were relinquished as weak manufacturing sector figures and the disappointing report from payroll processor ADP fuelled uncertainty over the fate of quantitative easing ahead of today’s key unemployment data release. The US currency traded lower yesterday against most of its major counterparts; dropping to four-month lows against both sterling and the euro. Benefit claims information yesterday however were shown to have having fallen, indicating businesses are gaining confidence demand will survive federal budget cuts. Attitudes surrounding the economy’s recovery though have dampened slightly over recent days and much focus will be on Non-Farm Employment Change and Unemployment Rate figures as the Federal Reserve has identified the job market as key to influencing monetary policy this year. Talk to your trader as events transpire and for up to the second prices.