Having hit a fresh six-month low against the single currency in early trading , the pound rebounded yesterday, to close up half a cent at 1.0864.
- Unexpectedly weak data in the UK manufacturing industry on Tuesday continued to weigh heavily on the pound, dragging sterling to a 6-month low of 1.0781.
- With little data out in either the UK, the eurozone, or the US yesterday, markets initially continued to take direction from Tuesday’s data, which supported sterling selling.
- The euro trimmed its gains though following the second quarter final GDP figure for the eurozone, which was revised downward from a contraction of 0.1% to 0.2%, dampening the broadly positive sentiment towards the currency.
- In trading today investors will be listening carefully to both the MPC and ECB’s respective rate statements for clues to future rate movements.
- Both central banks are expected to keep interest rates at record lows, however analysts have noted that the BoE, in light of recent economic data, may hint at extending their asset purchase scheme before the year’s end, which could greatly weaken the UK currency.
Related posts:
- Sterling relinquished strong gains vs euro yesterday as risk appetite eased
- The euro posted gains against the US dollar on Friday and has reached back over 1.46 this morning
- Sterling made gains against the kiwi yesterday, but rising risk appetite has supported kiwi advances today
- A strong kiwi dollar shrugged off weak data from the US to post gains against sterling on Friday
- Sterling continued to slide vs the euro on the run up to the weekend, but has capped its losses this morning
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