Foreign Currency Update On Sterling

  • 15 years ago
  • Uncategorized
Moneycorp Currency Brokers report that poor trade figures and positive UK house prices have equally little effect on the pound. US consumer confidence remains softer than analysts have been expecting.

A roughly three-cent range took sterling occasionally above its September highs but the early August peak remained out of its reach. It opened in London this morning at $1.67, about half a cent lower on the week but comfortably above Thursday’s $1.65 low.

There were not too many UK economic data and events to worry the pound last week but almost every one of them engendered some sort of reaction – mostly negative. It is a tribute to sterling’s growing resilience that on every occasion the loses were temporary.

The pound’s toughest hurdle was Tuesday’s trade figures. September’s trade deficit was substantially worse than investors had been led to expect. Instead of remaining steady at just over £6 billion the trade gap widened to more than £7 billion. The announcement coincided with unhelpful news about Britain’s credit rating. Ratings agency Fitch said the government’s reluctance to cut public spending could mean a downgrade of Britain’s sovereign debt, making it harder to sell.

One almost consistently bright topic was house prices. In the last eight days the RICS, the government and property website Rightmove have all – one way or another – reported positive news about UK residential property. For the RICS it was another improvement in its price balance, this time to its highest level in three years. At Rightmove, where they measure asking prices rather than actual transaction prices, a -1.6% monthly fall still left the index +1.6% higher than a year earlier
Source: Moneycorp
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