Currency news - CBI survey supports Sterling

CBI survey supports Sterling - 24-02-09

Sterling continued to strengthen during Monday and pushed to highs above 1.4650 against the dollar during European trading before a retreat to below 1.45 as global stock markets weakened. It also strengthened through 0.88 against the Euro, pushing towards 2009 Euro lows seen earlier in February. The UK currency continued to gain some support from hopes that some degree of confidence in the banking sector could be restored.

Any tentative move towards a more stable financial sector would tend to be a positive factor for the UK currency, but sentiment is liable to fluctuate sharply. The domestic and international financial-market trends will continue to have a key influence with Sterling near 1.45 against the dollar on Tuesday.

The BBA mortgage loan data recorded a small monthly increase for January, although there was still an annual decline of over 40% while the rate of retail sales decline also slowed according to the latest CBI monthly survey. The data will increase speculation that the rate of GDP decline is easing.

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

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