Currency Update

Well, thankfully, we have glorious Sunshine here in Leeds today (yes Leeds does see the sun occasionally), &  its a welcome appearance to dry up all the recent rain.

We were hoping for a small ray of light from the PMI results concerning the strength of the UK service sector this morning, to help clear some of those dark clouds……..

No such luck, the results were worst than anticipated, showing a contraction in the UK service sector, with a fall in employment, an increase in overhead prices & weak business expectations. The increase in their overheads have to be seen somewhere & consequently there’s not much change these days to be had out of a fiver for a pint & a bag of Seabrooks. Considering that this sector makes up nearly three quarters of our economy these results point further to its slow down. Again is seems as though our disposable income is less so & we are opting to cover the house bills rather than bar bills.

US positive comments overnight by the US Fed’s Bernanke, have given the USD some support & consequently the currency made gains against both the EURO & Sterling.

The poor old Pound, even the Nationwide’s Consumer Confidence survey has fallen to a 4 year low, further aiding the weakening of the GBP overnight. There appears to be little data to provide support over the remainder of the week, so we will have to look to US releases to in connection to their labour market to see if the GBP can take back some lost ground.

All set here for a no change stance by the Bank of England tomorrow, lets hope the same principle applies to the good weather.