The British pound moved higher vis-Ã -vis the U.S. dollar today as cable tested offers around the US$ 1.5890 level and was supported around the $1.5515 level. Cable weakened earlier in the day after Standard & Poors changed its outlook on the U.K. government€™s debt to negative from stable, the first time it€™s been negative since 1978. S&P is projecting that public sector debt will near 100% of gross domestic product over the medium-term. Even though the government€™s sovereign AAA credit rating remains intact, today€™s news is a blow for beleaguered U.K. Prime Minister Brown who has about one year before he must call an election. Sterling absorbed this news and rocketed to its highest level since 6 November. April retail sales were up 0.9% m/m after an upwardly revised 1.1% increase in March. Also, CML April gross mortgage lending printed around ‚¤10.4 billion and April public sector net borrowing reached ‚¤8.5 billion. Additionally, the M4 money supply was up 0.1% m/m and 17.4% y/y and Q1 business investment was off 5.5% q/q. Cable bids are cited around the US$ 1.5315 level. The euro gained ground vis-Ã -vis the British pound as the single currency tested offers around the ‚¤0.8870 level and was supported around the ‚¤0.8720 level.
Join the Discussion