It looks the rally of the Great Britain pound has run out of steam as the currency dropped yesterday. It attempted to bounce against the US dollar today, but so far the gains were nowhere near yesterday’s drop.
It is really no surprise that the sterling has backed down considering how long it was moving to the upside. It is rare for a currency to move in one direction for a long time without corrections. The pound also fell after Bank of England Governor Mark Carney said that policy makers are not yet ready to tighten monetary policy as they need to be sure that recovery is stable.
As for fundamentals, there were some disappointments, but for the most part they remain supportive for the currency. The Halifax House Price Index rose 0.3 percent in September, frustrating analysts who have expected 0.6 percent growth. The Markit/CIPS UK Services Purchasing Managers’ Index fell just a little to 60.3 in September from the Augustâs near seven-year high of 60.5. In the third quarter of 2013, the gauge has demonstrated the best performance since the second quarter of 1997.
GBP/USD dropped from 1.6220 to 1.6153 yesterday before trading at 1.6168 as of 3:39 GMT today. EUR/GBP was at 0.8424 after rising from 0.8368 to 0.8427 on the previous trading session. GBP/JPY traded near 157.18 following the drop from 157.90 to 157.09.
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