As the North American session got underway the Pound moved away from an over four-year high against the US Dollar, with the GBP to USD exchange declining by the most for two months.
Although the British currency held its own against the Euro, the Pound was a little softer against the ‘Greenback’ as investors bet that the British currency’s recent rally had been overdone.
Sterling’s modest decline was also the result of slightly disappointing UK construction output data.
While UK manufacturing production increased by more than expected and industrial production declined by less than forecast, domestic construction output dropped by 1.0 per cent in March, month-on-month, following a fall of 2.0 per cent in February.
Economists had anticipated a monthly gain of 0.6 per cent.
On the year construction output was up 6.4 per cent, considerably less than the 7.1 per cent estimated.
Forex strategist John Hardy said this of the Pound to US Dollar movement; ‘We did see a surge in Cable this week but the move is really on its last legs of support levels. The market is getting overextended and we are seeing a broad based recovery in the Dollar’.
However, as trading continued and additional data was published the Pound fluctuated modestly against its US rival.
The appeal of the US Dollar dimmed slightly after the US JOLTs job openings report delivered a figure of 4014 for March rather than the 4125 expected.
The Pound, on the other hand, was bolstered by the UK’s NIESR GDP estimate for April.
While expansion for March was negatively revised from 0.9 per cent to 0.8 per cent, the projection for April came in at 1.0 per cent.
The National Institute of Economic and Social Research also anticipate that the economy will expand by 2.9 per cent this year rather than the 2.5 per cent previously estimated.
The upward revisions were made due to the first quarter’s impressive growth and the pick-up in domestic consumption.
Next week the most important piece of UK data to be aware of is the nation’s employment figures.
GBP to USD movement could also occur as a result of several influential US reports, including advance retail sales, consumer inflation, housing starts, building permits and the University of Michigan confidence index.
US Dollar (USD) Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
US Dollar,
,Pound Sterling,0.5931,
US Dollar,,Canadian Dollar,1.0829, 
US Dollar,,Euro,0.7253,
US Dollar,,Australian Dollar,1.0680,
US Dollar,,New Zealand Dollar,1.1573,
Canadian Dollar,,US Dollar ,0.9179,
Pound Sterling,,US Dollar,1.6857,
Euro,,US Dollar,1.3793,
Australian Dollar,,US Dollar,0.9363,
New Zealand Dollar,,US Dollar,0.8624,
[/table]
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