The pound weakened against the US dollar by 0.88 cents yesterday, to close at 1.4839 after largely weak economic data saw sentiment weaken as investor’s hopes of an economic recovery were dampened. News that JP Morgan had reported better than expected quarterly profits in the US saw confidence in the global banking system improve, and led to the FTSE 100 making gains of 2.13% by the close of the markets. In fact, the pound’s weakness was largely technical as its inability to post substantial gains above the 1.50 level led investors to take profits. In the US the rate at which housing starts and building permits were falling eased, which pointed to an easing of recessionary pressure on the US housing sector. It was also announced that the number of newly unemployed Americans applying for benefits fell to 610,000, although the number of continuing unemployed on benefits rose to 6.022 million.
In today’s trading the pound has continued to slide ahead of the announcement of the Reuters/Michigan Consumer Sentiment Index in the US as well as a speech from Federal Reserve Chairman Ben Bernanke. There are no major economic announcements in the UK today.
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