Wednesday 12th October 2011
Good morning. Further poor UK data has pushed Sterling down against other currencies. The Euro also strengthened pushing GBP/EUR rates down quite a bit, after Greece's international lenders said the country would receive vital bailout funds next month. At 08:30am this morning rates are as follows:
• GBP/EUR 1.1423
• GBP/USD 1.5594
• GBP/AUD 1.5641
• GBP/NZD 1.9905
• GBP/CHF 1.4170
• GBP/CAD 1.6017
• GBP/ZAR 12.297
• GBP/JPY 119.52
• GBP/DKK 8.5012
• GBP/NOK 8.8790
• EUR/USD 1.3650
Sterling remains weak due to poor UK data
The UK's recovery is likely to be the weakest of any since the end of World War I, the National Institute for Economic and Social Research said yesterday. Other figures from the Office for National Statistics data showed the manufacturing sector shrank in August, putting further pressure on the Pound.
The ONS data showed the UK's manufacturing output was 0.3% lower August than in July. Compared with a year ago, it was 1.5% higher, which is the weakest annual growth since February 2010. Analysts said the sluggish economic data and comments by BoE policymaker David Miles defending QE added to the impression UK monetary policy could remain extremely loose for some time.
"The recent data has been a mixed bag and can't see anything to get too bullish about sterling," said a London based trader. The general view in the markets is that Sterling is likely to remain under pressure against other currencies such as the Euro and US Dollar.
Euro gains strength, pushing GBP/EUR rates down
Slovakia's parliament has voted against measures to boost the powers of the eurozone bailout fund yesterday, which is seen by analysts as vital in combating the EU debt crisis. The governing coalition had linked the vote to a confidence motion and as a result has effectively been toppled.
Slovakia is the last of the eurozone's 17 members to vote on expanding the European Financial Stability Facility. However a second vote could be held soon and is likely to succeed.
The fact the second vote is likely to go through caused the Euro to strengthen during late trading yesterday, pushing Sterling lower against the single currency.
Today's Data
Unemployment figures from the UK are the main numbers to watch for today. An increase in those claiming unemployment benefits would weaken Sterling. There are some industrial production figures from the EU later in the morning.
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