USD/GBP Rate & Comments for 2nd July 2010

USD/GBP - 1.516

Sterling jumped to an 8 week high yesterday against the US dollar of $1.5144/£1 as the dollar fell due to poor manufacturing, housing and employment data. The pound started the day poorly after lower than expected Chinese manufacturing data cast doubts over the global recovery. UK manufacturing data showed a drop from 58.0 to 57.5 which added to sterling’s woes. However, the pound rallied by over 1% against the US dollar after a similar measure of manufacturing activity in the USA showed the sharpest drop since December 2009. In addition, poor housing sales data added to the dollar’s problems. Against the euro, the pound weakened after concerns over European sovereign debt eased. In terms of data, there is construction PMI data out in the UK today which is expected to show a small improvement. With a lot of volatility, yesterday was a classic example of why it is so important to speak to a currency specialist sooner rather than later in order to take advantage of large upswings and avoid buying at the bottom of the market. Call in now for an up to date assessment of where things are heading for the pound.

In the USA, following an expiry of tax credits for property buyers, pending home sales dropped by 30% in May and the ISM manufacturing index fell from 59.7 to 56.2 – the biggest fall in activity since December 2009. The big event of the day though is the US Non-Farm payroll data – out later this afternoon. Most analysts are expecting a fall of over 100,000 jobs on the month, and this data generally sets the tone for the following week’s sentiment for both the US economy and the global recovery as a whole. Get in touch now to ensure you don’t fall victim to adverse market movements.

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