Sterling Starts The Month Down
4 February, 2014
Yesterday we saw the start of a new month which kicked off unfavorably for the pound. The first round of data releases came and went, with manufacturing PMI the first out which showed a lower than forecast rate for the UK. Although the reading was still above the 50 marker showing growth in the sector it came out lower than the Euro zones reading, resulting in the pound taking a nosedive across the board.
Over the course of the day the pound lost value against all major currencies, including a cent against the euro and nearly a cent and a half against the US dollar. Don’t forget we were coming from lofty highs though as sterling managed to close last month at fresh highs but still, is this a sign of things to come? Some analyst reports witnessed yesterday showing the technical graphs for the pounds trend over recent months has highlighted we could be on course for a correction to the gains we have recently seen. Sentiment which has been moving the pound could start to falter if we post continuous under expected figures, so was yesterday the start? We will have to wait and see.
Overnight the Reserve Bank of Australia held their interest rates at 2.5% for another month, leaving the broadly weak Aussie some breathing space for another month. Later this morning we have fresh data from across Europe, with UK construction PMI competing against EU inflation figures in the shape of Italian CPI and EU PPI data. Another under achievement for the UK could lead to further losses for sterling so keep in touch with your broker if you have a euro requirement just in case.
This afternoon is a little less key with data from the US of little importance alongside speeches from Fed members Lacker and Evans giving some insight to US policy. If you’re looking to buy Kiwi dollars at all, then overnight sees the important unemployment figures release so it might be worth acting on your requirement today rather than risking any volatility overnight. So a little light today for data could see this mornings figures form the basis for trade, so if the UK miss the mark we could have another day of downward trending for sterling. Don’t get caught out, speak to one of the team of friendly brokers at Currency Index this morning for some guidance with your upcoming exchange.
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