In Tuesday’s trading the pound strengthened by 0.40 cents to close at 1.4894 after rising equities gave sterling a boost. Banking shares performed well on news of Goldman Sachs’ strong first quarter earnings, which improved risk appetite and saw demand for the pound increase, especially as the health of the UK economy is heavily dependent on the banking sector. There were no major economic announcements in the UK yesterday, but in the US poor retail sales data was released showing that consumer spending had fallen 1.1% in March.
In today’s trading the pound has pared some losses having hit a low of 1.4824 and currently sits around yesterday’s close. This is ahead of the announcement of the Department of Communities and Local Government House Price Index in the UK, and the Consumer Price Index, TIC flows, capacity utilization and industrial production figures in the US. Also announced in America is the NY Empire State Manufacturing Index and the NAHB Housing Market Index, as well as the Fed’s Beige Book. With this barrage of data coming out in the US investors will also be paying close attention to the announcements of quarterly profits from American financial institutions over the coming days, with some suggesting that good figures will spell the end of the woe that has crippled the financial sector.
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