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Pound lower against Dollar

Pound lower against Dollar

GBPUSD had a mixed day yesterday with an early push above 1.3800 being reversed to around 1.3750 by the close of play. The Euro corrected to around 1.1655 after hitting resistance at 1.1630.

UK mortgage approvals declined to 75,100 in July, below market expectations of 78,500. Mortgage lending contracted following June’s tax-related surge and there was a renewed decline in consumer credit which all suggested rising caution in consumer spending and reinforced doubts whether the overall UK economic recovery would be sustained.

In Euro-land German unemployment declined and the Eurozone CPI inflation rate increased sharply to 3.0% for August, significantly above consensus forecasts of 2.7% and the highest rate since late 2011. This immediately fed speculation into when the ECB would need to act and council member Holzmann stated that he would advocate for a reduction in the PEPP bond purchases (the money printer) for the fourth quarter of this year. The Euro initially pushed to highs near 1.1850 against the Dollar before it dipping sharply to 1.1800 as month end position adjustment clipped its wings.

Sterling opens near 1.3740 against the Dollar while the Euro held firm just below 1.1641.

 

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