Sterling weakens as BoE minutes weigh

The pound weakened slightly against the US dollar yesterday, falling by 0.13 cents (0.08%) to finish the day at $1.6397.

• In early trading yesterday sterling weakened against the dollar, after minutes from the Bank of England’s latest meeting revealed no alteration in their medium-term economic outlook. This news was taken negatively by the market following some more positive data out in the past few weeks.
  
• However, the pound’s losses were capped after some better-than-expected UK employment data, which revealed an easing in the rate of unemployment. The number of people claiming jobless benefits rose by 39,300 last month, below the 60,000 increase expected.
  
• Sterling ’s falls also came despite weaker-than-forecast inflation data out in America. US CPI rose just 0.1% in May, dragging the annual inflation rate down to its lowest level since 1950. This fuelled speculation that the US Fed will rule out an interest rate rise in the medium-term at their meeting next week.
  
• In trading so far today the market remains relatively unchanged, as investors continue to digest President Obama’s financial regulation plans announced last night.
  
• In the UK, Retail Sales (MoM) are due at 09.30 BST today, whilst in the US Unemployment Claims are out at 13.30 BST.