Pound Recovers from Political Drama
The Pound Sterling regained yesterday's losses against the US Dollar and recovered from the 6-month trough as the FX market stabilized in the wake of the Italian political drama. There is hope now that a new election could be avoided, however FX traders remain wary. Against the Euro, the Pound continued to struggle, analysts say thanks to the bounce the Euro received from some upbeat surveys. Industrial confidence, business climate and economic sentiment indicator all showed better than expected readings for the Eurozone in May, with some improvement as well to April's readings.
As reported at 11:34 am (BST) in London, the GBP/USD was trading at $1.3266, a gain of 0.06%; the pair has ranged from a session trough of $1.3242 to a peak of $1.3294. The EUR/GBP is trading at 0.87594 Pence, a gain of 0.5557%; earlier, the pair had hit a peak of 0.87600 Pence while the low for the session is at 0.86983 Pence.
UK Data to Drive Sterling
In the UK, some upcoming data may help investors better gauge the economy. Later today, the GfK Consumer Confidence survey for May will be released with economists forecasting a slight improvement. On Thursday, housing prices, consumer credit and mortgage approval information will be released. Then on Friday, markets' attention will turn to the Markit PMI Manufacturing survey, with economists calling for a slight drop to 53.6 in May from 53.9; for reference, 50.0 is the threshold which separates a contracting sector from one that is expanding.