During the North American session the Pound was holding steady against the US Dollar even as US housing figures disappointed expectations.
Sterling was slightly softer against the ‘Greenback’ and weaker against the Euro following the publication of fairly neutral minutes from the Bank of England’s latest policy meeting.
The Pound was barely affected by UK deficit data.
As the European session progressed Sterling fluctuated slightly against the US Dollar despite a US economic report which failed to live up to expectations.
The US new home sales report showed that sales dropped to an eight-month low in March, slumping by 14.5 per cent on the year
Economists had expected existing home sales to have increased by 2.3 per cent.
February’s month-on-month figure was also negatively revised to a decline of 4.5 per cent.
According to an economist with Moody’s Analytics; ‘it’s the reduction in affordability, the lack of inventory, also weak growth in median household income – all these are contributing to the sluggish recovery in housing. It’s going to raise concerns about the strength of the housing recovery, but it’s too early to be too worried.’
However, while Markit manufacturing PMI for the US dipped from 55.5 to 55.4 in April (instead of climbing to 56.0 as forecast) the result still showed the fastest pace of production output for more than three years.
Both manufacturing output and new orders increased in the world’s largest economy, indicating that the second quarter got off to a strong start.
In a statement issued with the data Markit economist Chris Williamson noted; ‘With manufacturing acting as a good bellwether of the rest of the economy, the survey bodes well for further robust economic growth in the second quarter. Companies are taking on staff to build operating capacity in the face of an increasingly favourable outlook. The April survey recorded ongoing job creation in the region of 10-15k per month in the goods producing sector. This is a domestic-led upturn: although new export orders rose at an increased rate, faster growth of new orders is being driven by surging demand from US markets.’
Williamson did also observe that there are ‘signs of price pressures easing’ – a factor which supports the case for the Federal Reserve leaving interest rates at record lows.
A lack of influential economic reports for the UK means that GBP to USD movement will be driven by US news tomorrow.
The nation’s initial jobless claims figures and durable goods orders report will be of particular interest.
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,0.5959,
US Dollar,,Canadian Dollar,1.1032,
US Dollar,,Euro,0.7232,
US Dollar,,Australian Dollar,1.0776,
US Dollar,,New Zealand Dollar,1.1666 ,
Canadian Dollar,,US Dollar ,0.9056,
Pound Sterling,,US Dollar,1.6767,
Euro,,US Dollar,1.3826,
Australian Dollar,,US Dollar,0.9271,
New Zealand Dollar,,US Dollar,0.8583 ,
[/table]
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