Written by Jon Beddell on February 9th, 2012
Yesterday’s push above 1.59 was swiftly rejected but we appear to have found some support at 1.58 this morning.
Last week was relatively uneventful on the data front, with three separate UK surveys delivering mixed results; the Manufacturing and Services sector surveys convincingly beat expectations, printing at 52.1 and 56.0 respectively, while the PMI Construction survey disappointed, registering at a lowly 51.4 (figures above 50 indicate growth). In the US the main data items were focused on the labour market, with all indicators pointing to a slight improvement in the employment situation. Probably of more relevance was an improvement in sentiment toward the Euro that tended to work to the detriment of the Dollar.
Today’s UK balance of trade figure showed a deficit of £7.1bn, although this was somewhat better than the £8.6bn expected. Manufacturing and industrial production figures also came in better than expected this morning and Sterling has perked up slightly in the minutes since these releases.
*Denotes the importance of the data item *** being the highest level.
*** The key UK data release this week comes at lunchtime Thursday, when the Bank of England Monetary Policy Committee announces its interest rate/asset purchase scheme decision. An upping of the current £275bn allocated by the Bank to its QE programme would be likely to damage the Pound. The market sees a good chance of an increase to £325bn.
*** The ECB also announce their latest interest rate decision at 12:45pm Thursday. We expect rates to remain on hold at 1.0%.
** The closely-watched NIESR GDP Estimate for the UK is released on Thursday afternoon. If the monthly figure for January beats December’s counterpart number of 0.1%, then Sterling will be supported.
** Federal Reserve Chaiman Ben Bernanke gives a speech at 12:30 on Friday
** US December trade balance is out at 13:30 on Friday with a $48.2bn deficit expected.
Sterling has managed to make new highs four weeks on the trot. Yesterday’s push above 1.59 was swiftly rejected but we appear to have found some support at 1.58 this morning. Having taken out the Nov/Dec highs around 1.57 and convincingly held onto this ground the next natural target is the October 2011 high at 1.6150. A break above there would be very positive for the medium term trend. On the downside a failure to hold onto the 1.57 level would be considered cause for concern.
- Pound Sterling, the Euro and US Dollar exchange rate news – The Pound rallied towards the highest level in six weeks against the Euro
- Pound Sterling to Australian Dollar Foreign Currency Exchange Rate Forecast – Kiwi surges 8% in four weeks
- Pound Sterling to Swiss Franc Foreign Currency Exchange Rate Forecast – The Franc and Gold hit Record Highs…
- The Pound to US Dollar exchange rate has fallen this week from highs around 1.495
- Pound Sterling, the Euro and US Dollar Currency News – The Pound traded close to the lowest level in three weeks against the Euro