Pound at a 10 week low against the euro
Currencies Direct August 26th 2009 - 2 minute read
Pound at a 10 week low against the euro
The pound had another dismal day in the markets yesterday and has not started particularly well this morning. The pound has slipped to 1.63 against the USD and to 1.1379 against the euro. With little fresh data from the UK the market is selling sterling more on sentiment, the sentiment being that the UK is diverging in its central bank policy from the ECB and the Federal Reserve. With the prospect of a further contraction in UK GDP on Friday this could be a week to forget for the pound. Economic data just out from Germany in the IFO survey also came in slightly better than expected for both business sentiment and expectations- this could add more woes to the pound although no price action seen as yet.
Yesterday we had more upbeat data from the US with Consumer Confidence way above expectations and the Home price index also better than expected. This positive feedback from the consumer and housing sector does reinforce the good sentiment in the industry and manufacturing sectors. President Obama also confirmed the re-appointment of Federal Reserve chairman Ben Bernanke for another 4 year tenure with much back slapping for his aggressive policies. Although the policies are showing good results now, the question will remain on whether this is sustainable going forward.
In other news Oil dropped in later trading topping out at the $75 level. The Bank of Canada also expressed concerns on the recent strength of the Canadian Dollar suppressing export related growth- the CAD is particularly strong against the USD with speculation of moving to parity. Yesterday the fall in Oil and possible the expressed concerns eased the USD/CAD from 1.07 levels to 1.09.
report by Phil McHugh
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