Sterling continues to lose ground against the dollar | Smart Daily Currency Note
GBP/USD – 1.5142
A strong construction sector did not make for a strong sterling yesterday. While Construction Purchase Manager Index (PMI) figures were the best they have been since May 2012, sterling still lost ground against the US dollar – pushing as low as 1.5150 against a bright US dollar in the early afternoon. Today the big news is the last of the PMI figures – Services which make up 75% of the UK’s GDP and has shown consistent growth, month on month, since February. The consensus expect slightly less growth than last month, but positive news nonetheless. If the release beats expectations – given the importance for the UK’s economy as a whole – expect sterling to strengthen. That being said, you can expect the market as a whole to remain nervous in anticipation of the Bank of England monetary policy meeting on Thursday where we will see Mark Carneys’ first rate decision as Governor. Not only that, but on the same day we will have the ECB’s decision on interest rates and decreased liquidity due to the US markets being shut in accordance to the 4th July Bank Holiday. Call your trader this morning for the very latest developments.
The US dollar enjoyed a strong day yesterday as factory orders exceeded expectations to post a second consecutive month of growth in manufacturing. With a bank holiday tomorrow for Independence day, expect volatility to be on the up over the next few days. Eyes will be on unemployment figures released today and Friday with the consensus expectations being cautiously optimistic. The labour market has long been linked with monetary policy in the US and with chatter about the end of monetary easing programs dominating affairs, good news would definitely boost the dollar. Call in now for the latest news and live rates for the US dollar.