During yesterday’s trading session the GBP/USD exchange rate dropped below the key 1.20 handle, even if only for a brief moment but it’s a sign of the Pound coming under pressure regardless.
The Pound has also lost some ground against the Euro and after spending some time trading in the 1.13’s and testing 1.14, the pair are now firmly in the 1.12’s despite some better-than-expected economic data releases out of the UK.
There has been a lot of talk and media headlines warning of a recession within the UK owing to an economic slowdown coupled with increasing inflation levels and interest rates creating a cost-of-living crisis.
During yesterday’s economic releases there were some encouraging signs for the UK economy though, as the construction sector reported a strong rebound in fortunes. Activity within the building sector is measured by the CIPS Construction Purchasing Managers Index (CPI) and during February growth was reported, as the figure released was above 50. The fastest level of growth was reported in 9-months which for now will ease concerns of a long-lasting recession.
Car sales also jumped by 26% is another positive economic release, but despite these positive data releases the Pound remained downbeat and slowly weakened throughout the day’s trading session, breaking below 1.2000 against the US Dollar as previously mentioned.
This morning Halifax has reported that UK house prices grew by 1.1% during February which could calm concerns of a property market correction.
I have previously touched on how UK property prices can impact consumer spending habits so signs of stability within the property market are a positive for the UK moving forward. Once again though, this data has done little to boost the Pound which could be a sign of further weakness to come for GBP exchange rates.
Looking forward, Friday could be busy for GBP exchange rates as UK GDP figures will be released along with Industrial and Manufacturing data. Do feel free to get in touch if you wish to plan around this release.
You can contact me (Joe) directly on [email protected] if you wish to obtain a quote for an upcoming currency transfer you plan on making. We can also set up rate alerts and offer an overview regarding upcoming economic data releases which could impact currency markets.