Pound, the major currency of UK went down to a figure that’s the lowest in last 2 weeks against the greenback after a report came out stating that the retail sales of US unexpectedly went higher on last month, thereby attracting the investors to the major currency of the biggest economy in the world. Not only against USD, but, Sterling went down against most of its major counterparts as well. A UK business lobby, on today, stated that the company sentiment has shown improvement and in the next 2 years, overall growth should pick up. As far as Government reports of last month are concerned, US economy has expanded 8 times in comparison with that of UK in the 1st quarter of this year. On today, the UK Government bonds were more or less unchanged. On tomorrow, the British Debt Management Office is set to sell 4.75 billion Pounds of 5-year gilts.
According to the Currency Strategist of the Commerzbank AG, Peter Kinsella, USD is now catching a bid and hence, the upside in the Sterling will be sort of stretched. Kinsella added that the growth differentials between US and UK have not been this extended since the 1980s. However, Kinsella commented that the price action is indicating that Sterling have finally found a top.
On today, Pound has declined by 0.5% and it is currently at $1.5285. At one point of time, it fell to $1.5282, marking the weakest level of the same since 25th April. After strengthening by around 0.3%, Sterling tumbled by 0.3% against Euro. It is currently priced at 84.85 Pence per Euro.
According to the Confederation of the British Industries, the UK economy is expected to grow at a rate of 1% in 2013 and 2% in the next year. The estimates are same as published in last February. The Director General of the same, John Cridland stated that as he had conversations with several business leaders, he has heard that many firms are currently on a cautious footing.
However, some, at the same time, are more confident of the economic outlook. Cridland commented that the correct way of judging the economy is to see that it’s moving from flat to growth. In the 1st quarter, the Gross Domestic Product of UK increased at a rate of 2.5%, as stated by the Commerce Department on 26th April.