Currency Rates

US$/GBP – 1.497

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Sterling fell to 1 week lows against the euro and US dollar as investors reacted to the gloomy outlook in the UK. Sterling hit $1.4873/ £1 and 1.0966/ £1 as Tuesday’s political opinion polls and a fresh round of poor economic data continued to weigh on the pound. British manufacturing output unexpectedly showed a decline of 0.9% - the largest monthly drop since August last year, and clashing with the market’s expectations of a rise. Relatively positive comments from a member of the Bank of England offered sterling some support, but Ian Stallard (a senior FX analyst from investment bank BNP Paribas) stated today that the short term outlook for the pound remains negative. He expects the pound to extend losses towards $1.44/ £1 in the next few weeks. We wait to see if he is right. It is a relatively quiet day for economic data today, with some consumer inflation expectation data out. Despite this, the pound is likely to remain volatile – get in touch now to avoid missing out.

In the USA, there was little data out yesterday and the US dollar strengthened against sterling off the back of a poor UK performance. It was a rather mixed day from an analysis perspective. Citibank suggested that from a technical perspective (looking at trends on graphs) the dollar is poised to fall back down to $1.57/ £1 but as mentioned above, BNP Paribas (taking a more fundamental view of economic data) feel it is likely to go the other way. This goes to show how important it is to be in touch with a currency strategist at an early stage, as things really can go either way at the moment. Out today we have the US trade balance and unemployment data – call in now for a quote.

Call 0808 163 0102 or +44 (0) 207 898 0541 from outside the UKor fill out our quote form: http://www.smartcurrencyexchange.com/quote.aspx