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Yesterday the Pound affirmed its status of being the current whipping-boy currency following the disappointing manufacturing and industrial production numbers yesterday morning. Given the much worse than expected trade figures from Tuesday, economic pundits had marked down their assumptions for yesterday’s data but the outcome proved even less palatable. Given the lack of anything more relevant, Sterling was sharply sold off, touching a low of 1.4870 against the Dollar and dipping down to 1.0950 versus the Euro. Today the pound has managed to forge a move back over 1.10 (just) and 1.50…news that a Bank of England survey expects inflation to rise for the year ahead has helped. The market again needs to target 1.52 on the USD and sustain over 1.10 against the euro before we can look at sterling pushing higher. Still a lot of negatives in sterling so I am not that bullish on todays move.
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That is for sterling and the UK economy as Industrial production for January and manufacturing output came out much weaker than expected. Industrial output was -0.4% month on month and manufacturing output was -0.9%. Thus we have more negative feedback on top of yesterdays negatives to further reinforce the selling pressure on sterling. Gordon Brown was also speaking this morning on the UK economy; he affirmed that the recovery is in the early stages and remains fragile. There will be a budget in 2 weeks time which will set out more detail on deficit reduction- certainly needs to. As we have discussed sterling needs some clarity and so do the credit rating agencies.
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The consolidation period for Sterling did not last too long and overnight in Asian trading and so far this morning it has been under selling pressure again. The reason for the fall today has again been attributed to narrowing polls showing that Labour and conservatives are “neck and neck”. In addition credit rating agency Fitch has stated that the UK sovereign credit profile has deteriorated and Moody’s has warned that some UK banks could face downgrades. To top it off we have received poor economic data with UK RICS house price balance coming in weaker than expected and the UK January trade balance was also weaker than anticipated. The pound has crashed back through the 1.50 level against the USD and is testing the 1.10 level on the euro.
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Sterling has started the week above 1.51 against the USD and over 1.10 against the euro as it looks to continue consolidating after suffering heavy losses last week. Sterling was cushioned by improvements in consumer confidence and UK PMI which showed gains in the UK service sector. The FTSE also climbed to an 18 month closing high on Friday and pushed over 5600 this morning before falling back a little. The recent economic data from the UK and the not so bad non-farm payrolls is helping to allay fears of a double dip recession- could this lead to further rallies in the equity markets? If so we can expect to see the return to confidence accompanied by selling pressure on the USD and the JPY, some gains in the GBP and EUR and more broadly in the commodity currencies such as the AUD, ZAR and CAD.
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Yesterday it was announced that the BoE were keeping interest rates on hold at 0.5% and the asset purchase programme was held at £200 billion. The stronger PMI data this week and the improvement in the revision of Q4 2009 GDP has helped the MPC to be comfortable in their current wait and see policy. An article in the Telegraph interestingly pointed out that if it was not for QE the UK would still be in recession- could well be the case. The fact that there was no expansion helped to keep sterling supported just over 1.50 against the USD and 1.10 the EUR- we really need to see a move beyond 1.52 before we can start to relax a little.
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The short month of February is over already and this month we went back to supporting 3 charities and showing our support via the gold coins!

We raised a very healthy £219.15 in February which has pushed the co-operative wall total up to £4966 - almost at the £5k mark. And this is a significant benchmarking moment as Currencies Direct employees have now been regularly supporting charities for 1 year. To almost reach £5000 in one year of contributing from an office of just 50 people is inspiring. I wax lyrical about the commitment and enthusiasm that has sprung from Currencies Direct to anyone outside this office that will listen. Its hard to believe that just 12 months ago we didn’t do anything, and now I can look at a wall of thank you letters from charities praising our good work and the help that the money raised has been to them!

Thank you to everyone who has helped make this a success, I am very proud.

So, which charity was your favourite in February. The breakdown is below:

Shelter £71.99
Streetchild £81.68
Mencap £65.48

So February was close, but Streetchild just came out on top. The co-operative wall has been updated with the new charities that we will be supporting in March and these are:

Help a London Child
Born Free Foundation
Epilepsy Research

As always, click back here for regular updates on the additional fundraising activies that we get up to!

Thank you for reading