Sterling marches against the US dollar

Sterling strengthened against the US dollar yesterday and overnight into this morning. However, it continues its sideways march against the euro as thin data limits direction.

GBP: ups and downs for sterling

A mixed day for sterling, which strengthened against the US dollar but weakened slightly against the euro. However, the pound did stretch itself over half a cent, from a high of €1.129 to a low of €1.125 as news came in that the FTSE had hit a new record. There was no other significant data and all we have to look forward to tomorrow is the BBA Mortgage Approvals for November (issued today, not as stated yesterday). As we erroneously mentioned yesterday, this offers only a partial picture of UK housing demand but will be looked on with interest as we look for clues as to the likely performance of the British economy in this second year of our post-referendum future.

EUR: single currency strengthens against USD and GBP

Against the US dollar the single currency got back into the $1.19 level, seldom seen in the past few months. The euro also strengthened against the pound as a quiet day for the markets rolled along. What economic data releases there were came out positively for two of the EU 27’s four biggest economies: French unemployment fell and Spanish retail sales rose, both far ahead of forecasts.

There are no significant data releases today.

USD: lack of confidence hits dollar

The dollar lost half a cent against the pound yesterday, with the pound hitting a high well over $1.342 before settling back to $1.34 – still a cent above the average over the Christmas period. The blame for the dollar’s weakening can be laid at falling confidence, with the US Conference Board consumer confidence for December falling to 122.1 against an estimate of 128.

Data releases for today include both initial and continuing jobless claims.

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