GBP/USD update (4th Jan 2011, 11:30)

Visit Save For Later

by Market Moves Staff

Posted

A rise in manufacturing activity in the UK in December helped to offset any negative impact on sterling caused by the rise in VAT this morning.

According to Markit and the Chartered Institute of Purchasing and Supply (CIPS), the UK manufacturing index grew at its fastest pace since December 1994, rising to 58.3 from 57.5 in November and defying economists surveyed by Bloomberg, who had expected a slight fall to 57.2. Markit said that weakness in sterling had helped British exports, and the CIPS added that the figures augured well for a continuation of the manufacturing-led recovery in 2011. Also aiding sterling’s rise against the US dollar was an unexpected rise in mortgage approvals in November. Data from the Bank of England showed that the number of approved home loans hit its highest level since July. 48,019 loans were given the go-ahead, with the data following on from last week’s surprisingly resilient house price survey. However, UBS cautioned that the improvement, although welcome, was from very low levels, and that there was still much room for progress in the mortgage market.

As the January sales continue, investors will keenly await updates from retailers about the state of sales over Christmas. Stronger-than-expected figures will suggest continued strength in UK consumer spending, although this is likely to have been distorted by purchases made in advance of today’s VAT rise. If reports for the next two months show disappointing sales, then sterling could weaken as investors worry about the UK economic recovery in the year of austerity.

Like Like

Contribute to this Story:

All Forex News

Recent Forex News Articles

EUR/USD update (11th June 2013, 06:00)11 Jun 2013
We continue to see some fairly disjointed moves in the FX space, as investors remain uncertain about US quantitative easing and volatility in Japan. There were some fresh developments in US trade as the greenback was supported by the S&P credit rating upgrade to stable (from negative). This res...
EUR/USD update (7th June 2013, 06:00)7 Jun 2013
It was all about the USD and QE repricing once again overnight, as the greenback lost ground to most of the G10 currencies. The ECB and BoE were also on the wires with their interest rate decisions. As expected, the ECB and BoE didn’t change their policy settings. ECB President Mario Draghi s...
EUR/USD update (6th June 2013, 06:00)6 Jun 2013
EUR/USD managed to ignore all the noise and held its ground above $1.300. The pair actually enjoyed a temporary spike to $1.317 on some positioning ahead of the ECB, only to drop back below $1.310. The ECB is expected to remain on hold, but the press conference will be a source of volatility ...
EUR/USD update (5th June 2013, 06:00)5 Jun 2013
Once again it was all about the USD and QE repricing, with Fed member Esther George on the wires urging the Fed to taper off on asset purchases. Markets remain quite choppy as investors are still uncertain about the future of QE. This was one of the key factors around mild USD strength and t...
EUR/USD update (4th June 2013, 06:00)4 Jun 2013
There were some big moves in the FX space, with risk currency pairs popping higher. It is clearly all about the USD and QE repricing at the moment, as the latest round of US economic data was once again the main source of volatility in the risk space. This time it was the US ISM manufacturing...
EUR/USD update (4th June 2013, 12:30)4 Jun 2013
Having bounced off $1.28, the EUR/USD pairing looks to be slowly making its way back up to the top end of the range. Yesterday’s economic data for Europe was broadly better than expected, although the afternoon’s US ISM manufacturing figures were disappointing. Expected at 50.6 they came in at 49, ...
EUR/USD update (3rd June 2013, 06:00)3 Jun 2013
Sentiment was relatively negative on Friday, with US and European equities losing ground on QE repricing. Better-than-expected Chicago PMI and University of Michigan consumer confidence readings set the tone for the USD. With heightening fears of Fed tapering, all good data seems to be bad ne...
EUR/USD update (3rd June 2013, 15:00)3 Jun 2013
The euro was pushed higher versus the US dollar after the release of better-than-expected manufacturing purchasing managers index (PMI) figures from the eurozone. A reading of 48.3 in May beat economists’ forecasts for a figure of 47.8. Even though any reading below 50.0 indicates a contraction, tr...
EUR/USD update (31st May 2013, 06:00)31 May 2013
Once again the USD was the centre of attention in a session where some key economic data was released. It was yet another roller coaster ride for the greenback, as QE repricing remains in full force. Some fairly disappointing economic data out of the US appeased the QE camp, as it delays the ...

Recent Articles

EUR/USD update (18th June 2013, 12:00)18 Jun 2013
While this morning traders will look towards UK inflation figures, this afternoon’s attention will be on those of the US, as they could help to give a clearer picture of their road to recovery. The G8 conference in Northern Ireland continues today, following last night’s delegate statements that th...
EUR/USD update (18th June 2013, 06:00)18 Jun 2013
The single currency has been remarkably resilient, but EUR/USD has struggled to advance past $1.338. This has capped gains in the near term, and we feel a significant catalyst will be needed to nudge through it. With ECB President Mario Draghi on the wires, along with the German ZEW economic ...
EUR/USD update (17th June 2013, 13:30)1 minute ago
The euro jumped higher versus the US dollar after strong German data showed a sign of recovery in the eurozone. Germany, the strongest economy in the eurozone, revealed a 3.9% increase in wages for the first quarter of 2013 – the largest jump in wages in four years. This provided a boost to the eur...
Market Comment 17th June 201317 Jun 2013
A tepid start is expected in Europe as traders bide their time until this week’s main driver, the FOMC meeting, concludes and releases its statement. With the G8 focussed on Syria and domestic economic data taking a back seat, only a couple of meeting minutes from the RBA and BoE may punctuate what...
Market Comment 14th June 201314 Jun 2013
European equities are set to open higher as markets steady themselves ahead of next weeks FOMC. Equities finished well off their lows yesterday as short term bearishness appeared to peak and a partial short squeeze took place. However, this doesn’t mark a turn around in sentiment and more of ...
EUR/USD update (14th June 2013, 06:00)14 Jun 2013
The US dollar was back in focus in yesterday’s US trade, with unemployment claims and retail sales on the wires. Retail sales came in at a better-than-expected 0.6% (versus 0.4% consensus), while core retail sales were in-line with estimates at 0.3%. Unemployment claims dropped to 334,000 (ve...
Market Comment 13th June 201313 Jun 2013
European equities are set to slump on the open as persistent weakness in the US and Asia spills over. The sell off from the 22nd May high, although interspersed with a few upticks, is set to continue as the thought of a world without quantitative easing makes markets shudder. Despite some better th...
Market Comment 12th June 201312 Jun 2013
European equity markets are set to open significantly lower as the fear of liquidity withdrawal intensifies. The thought of a life with out a central bank backstop isn’t going down too well with markets at the moment. With the Fed trying to communicate some cloudy message about the tapering o...
EUR/USD update (12th June 2013, 06:00)12 Jun 2013
It was a confusing session in global markets, as equities lost ground in a move that was largely blamed on the BoJ’s decision to maintain its current policy. However, the dominant theme in the FX space was the US dollar losing ground to the majors, prompting a rally in risk FX. There was no major d...