Sterling has a difficult start to the week | Smart Daily Currency Note
GBP/USD – 1.5232
A good morning for sterling yesterday as ‘economic rock star’ Mark Carney took the reins at the Bank of England and Purchase Manager Index (PMI) figures exceeded expectations, showing growth in UK manufacturing for the second consecutive month. Market reaction to the release was fairly muted and sterling weakened through the afternoon to finish close to 1.1650 against the euro. Today sees further PMI data, this time from the Construction sector. After finally breaking into the positive last month, good news would certainly lend support to a struggling pound, but whether it will be enough to sterling remains to be seen. At the very least, expect volatility in the run up to these releases. Call your trader now to see how sterling is doing today.
Following a strong performance last week, the US dollar showed some weakness yesterday falling against most of its major currency pairs including sterling and the euro. This was on the back of lower than expected construction spending and manufacturing PMI figures. Moreover, the employment section of the manufacturing PMI was shown to be contacting for the first time since 2009 (perhaps a precursor to poor non-farm employment change this Friday). This negativity indicates that perhaps the Federal Bank is further away from tightening monetary policy than the central bank had initially indicated. That being said, this weakness could only be short lived if we see further signs that the economy is on a sustainable path to recovery, or indeed if we hear more comments made about tapering the quantitative easing program from members of the Federal Open Market Committee. Call your trader now for live rates and news for the US dollar.