Sterling Gains Against USD, But Remains Broadly Under Pressure

Yesterday Sterling remained under pressure as investors concerned about the extent the Eurozone crisis would drag on the UK. The European Central Bank held interest rates at their policy meeting yesterday and the subsequent press conference gave little insight to how to tackle the growing problems in Greece and Spain. Despite this, we lost two cents over the Bank Holiday weekend against the Euro and although over the day gained back some ground against the single currency, the pound is down further this morning.

Against the US dollar the pound made headway, gaining 0.6 percent over the day as investors priced in the chance of further economic stimulus Stateside following comments from Atlanta Federal Reserve President, Dennis Lockhart, that policymakers may need to consider further easing. The pressure remains on the pound though as we look towards the Bank of England’s announcement at lunchtime today where analysts are talking up the chance we will have a further injection of cash into the UK economy through QE. The talk is of a further £50 Billion of asset purchasing which if confirmed, would more than likely weaken off the pound across the board.

The Pound has made some small gains across a basket of currencies this morning ahead of the BoE meeting after the PMI figure posted better than expected at 53.3, which more importantly being above 50 shows growth in the sector. Will the rally continue or will sterling be stopped in its tracks come lunchtime….