Friday July 1, 2005 - 10:22:22 GMT
Share This Story
INVESTICA Ltd - www.investica.co.uk
Sterling fell sharply during Thursday undermined by a combination of factors. Sterling fell to a low below 1.79 against the dollar and also weakened sharply to 0.6755 against the Euro from levels around 0.6625 48 hours previously. Sterling remained under downward pressure in early Europe on Friday, weakening to below 1.7750 against the dollar before a fragile recovery.
The UK data remained weak on Thursday with a drop in consumer confidence to -3 in June from -1 the previous month while consumer expectations moving forward were also depressed. There will be further expectations of a near-term interest rate cut and the futures markets are close to pricing in two 0.25% Bank of England rate cuts by the end of the year.
There is certainly a risk that the gloom is being overdone as the survey data may not be reflecting the overall state of consumer demand. The CIPS index for the UK industrial sector also recorded an improvement to 49.6 in June from 47.0 the previous month. Sterling sentiment will still remain weak in the short term and, in this environment, the currency will remain vulnerable to selling pressure. It is also the case that Sterling can be vulnerable to big moves when there is a decisive shift in confidence. Nevertheless, some correction is realistic in the very short term with volatility liable to increase.
Forex Trading News
Daily Forex Market News
Forex news reports can be found on the forex research
headlines page below. Here you will find real-time forex market news reports
provided by respected contributors of currency trading information. Daily forex
market news, weekly forex research and monthly forex news features can be found
Real-time forex market news reports and features providing
other currency trading information can be accessed by clicking on any of the
headlines below. At the top of the forex blog page you will find the latest
forex trading information. Scroll down the page if you are looking for less
recent currency trading information. Scroll to the bottom of fx blog headlines
and click on the link for past reports on forex. Currency world news reports
from previous years can be found on the left sidebar under "FX Archives."