POUND
The Pound was up on the Euro this morning but held back by the Dollar after attention focused on Euro zone debt problems after the U.S managed to stave off a default by agreeing on rising their debt ceiling and instigating spending cuts in time for their debt repayment deadline. Better than expected U.K Construction data this morning gave the Pound a further boost, although sustained gains are a less likely prospect with debt concerns in its counterparts’ regions a reason many see for recent sterling strength. “At the 1.15 mark people will be wondering if sterling has come down too far too fast. If you look at sterling`s fundamentals they are still pretty weak,” said Jane Foley, senior currency strategist at Rabobank. “The only reason sterling has picked up ground in recent weeks is because there was a crisis in the euro zone and then in the U.S. too.” So Sterling holds on to its gains on the Euro for now whilst down on the Dollar as the U.S stave off default and allow confidence to creep back in for Dollar buyers. Predicting further market movements even in the short term is proving to be a point of difficulty amongst analysts at present, with U.S and Euro zone debt travails and mixed U.K data affecting trader’s decisions the most at present.
