Currency news - Sterling in the doldrums

Sterling in the doldrums - 24-01-08

Sterling was unable to make any significant headway against the Euro on Wednesday and dipped to lows around 1.9465 against the dollar. UK currency moves are still being influenced strongly by carry trades and a Wall Street rally pushed the UK currency back above 1.9550. Sterling was finding it difficult to extend the recovery on Thursday as UK sentiment remained very fragile.

Despite the inflation warnings, there is a strong probability that the Bank of England will act to cut interest rates at the February meeting, but markets will be concerned that inflation fears will prevent the bank from cutting rates fast enough to prevent a serious deterioration in the economy.

The latest BBA mortgage approvals data recorded a decline to 42,100 in December from a revised 43,900 the previous month. The data is consistent with a sharp slowdown in the housing sector which will maintain a lack of confidence in the economy.

Tim Clayton
Investica Ltd
E-mail: tim.clayton@investica.co.uk
+44 (0) 1452 781001

Full list of daily currency analysis

This analysis report is intended for distribution to ACM Advanced Currency Markets SA private, corporate customers and members. Information contained in this report is based on data obtained from sources considered to be reliable, however, no guarantees be made by ACM Advanced Currency Markets SA as to the accuracy, timeliness and completeness of the data. The opinions and forecasts contained herein are subject to change without notice and ACM Advanced Currency Markets SA accepts no liability for any losses, damages and/or expenses incurred arising from or in any way connected with the utilisation of all or part of this report. This report is meant for information purposes and is not intended to be and should not be construed as an offer or solicitation to buy, sell foreign exchange or indeed any other financial instruments. This report, or any part of it may not be reproduced or distributed without the prior consent of ACM Advanced Currency Markets SA.