Sterling drops against the dollar after Tuesday’s gains

Sterling dropped by half a point against the dollar on Wednesday morning due to the UK unemployment data release. Tuesdays gains against the greenback were short lived as the UK unemployment data has shown that the number of people out of work increased by 28,000 to 2.67 million during the three months to January.  

The number of people claiming Jobseeker’s Allowance also increased by 7,200 to 1.61 million for the month of February, which was slightly higher than the 7,000 predicted and caused the GBP/USD cross to drop from $1.5750 back towards $1.57

The pound had gained strength recently with improvements in UK economic data, including house prices and retail sales and the recent positives have reduced the risk of the UK falling back into recession and of further quantitative easing by the Bank of England.

However, with continued concerns that the euro-zone debt crisis could spread beyond Greece investors headed back towards the safe haven status of the US dollar. Wednesday afternoon saw rates continue to fall and at the time of writing was sitting at $1.5663.

With Tuesdays gains there were a number of Limit Orders placed as clients looked to make the most from the market. Limit orders were placed with our brokers for $1.60 as clients looked for the gains to continue. When placing a Limit Order it is always worth looking at a Stop Loss order as well. This will protect you from any adverse movements and the gains you have already made.

If you are looking at buying or selling dollars in the coming weeks click here to send me direct email or complete the contact form on the homepage of the blog.