The pound remained buoyant on Tuesday but struggled to find meaningful gains on the back of some mixed employment figures.
Thursday’s slew of poor economic data kept the pound on the decline until the weekend. Industrial, manufacturing, construction and trade data for March all performed significantly worse-than-forecast. The National Institute for Economic and Social Research (NIESR) released their estimate for April’s GDP, expecting to see just 0.2% growth at the beginning of the second quarter; half the rate expected.
Additionally, the latest batch of developments from the Bank of England (BoE) weakened demand for the pound as well. It was supposed to be a ‘Super Thursday’, thanks to the release of the UK’s inflation report alongside the announcement of monetary policy decisions. However, Governor Mark Carney suggested that it was possible for interest rates to go lower if needed and intimated that the BoE still needed to ignore strong inflation in order to focus on the health of the wider economy.
Tuesday’s consumer price figures and Wednesday’s wage growth statistics will help gauge the outlook on the economy. While the pound could get a boost from stronger inflation, on the hope that it might prompt the BoE to rethink its cautious attitude towards raising interest rates, if Wednesday’s wage growth figures remain sluggish the outlook for consumer spending could weaken, undermining GBP.
Joining the corporate trading desk in 2007, Phil now over sees all of Currencies Direct’s corporate dealing activity. Having gained experience working with hundreds of businesses to optimise international payments processes and execute comprehensive risk management strategies, Phil currently works with a portfolio of corporate clients whilst managing Currencies Direct’s overall market exposure
Phil has FCA approval and has completed the Certificate in International Treasury Management (CertiTM)