Neil Davies, Head of Trading at PlutusFX, takes a look at Sterling.
Since cable peaked at close to GBP/USD 1.72 back in July, the greenback has strengthened across the board against a basket of currencies. Sterling hasn’t escaped, currently standing at 1.5685, though the decline has at least been taking a break over the last week.
Recent economic news that affects the Pair includes:
– US Fed minutes reveal consensus to end its stimulus programme. Despite concerns over weakness abroad, this was outweighed by confidence in a strong US economy. 0% interest rates, now entering their seventh year, likely to continue for a ‘considerable time;’
– UK mortgage lending grew by 5% in October to £19bn compared to a month earlier and 8% up on October last year. Indications are therefore that the gentle easing in the Market may reverse;
– US CPI year-on-year up to 1.7% from 1.6%;
– UK Retail sales ex-fuels up 4.6% year-on-year, up from 2.8% and higher than the 4.2% forecast;
– US continuing jobless claims fall slightly to 2.33m down from 2.4m;
– UK CB Industrial trends survey shows a positive figure of three from a negative six last month
Therefore, with positivity on both sides of the water, direction from here might be hard to call. There’s every chance politics rather than economics might be a factor. All eyes on Rochester.
