Sterling reverses losses against the US dollar

A relatively quiet day for sterling saw the currency make gains against a weakened US dollar, and trade largely sideways versus the euro. German factory orders were shown to have fallen throughout September but, with UK housing inflation also contracting throughout the month, sterling was unable to capitalise on this. US trade balance data provided the main point of interest during the afternoon, and as this figure reported a larger deficit than forecast, sterling was able to capitalise and reverse the small losses suffered on Monday.

Manufacturing production data will be released from the UK this morning, and should provide further insight into the health of this sector. With manufacturing growth seemingly on target throughout September, investors will be hoping for a positive reading following the previous month’s contraction.