The wait goes on. The wait for positive data concerning the UK economy that is. Whilst it is to be expected that data releases concerning a country’s economic performance will naturally vary from week to week, and month to month, it is far from the ordinary for a country, and in this case the UK, to record consistently negative data for several months. Just as these data releases are out of the ordinary, correspondingly so are the rates.
As we have been reporting for the past few months, since the turn of the year Sterling has weakened at an alarming rate. After having appeared to level off against both the Euro and the Dollar in recent days, hopes had emerged that the Pound may well recover some of its losses. However these hopes were quashed this morning following the release of PMI data across Europe. The UK was expected to record a figure of 51.0 and consequently markets reacted negatively when the UK’s actual figure of 47.9 was released. With positive PMI figures released for the majority of the other European countries this morning, this led to a significant sell off in the Pound. Sterling hit daily lows of 1.1514 and 1.5014 against the Euro and the Dollar respectively immediately following the release, before levelling off.
This afternoon we will see a number data releases from the US including PMI, Mortgage Approvals, Personal Income, and Personal Consumption figures. These figures could stoke further movement in the Dollar which forced Cable to a new eighteen month low earlier today.