Pound/dollar rates fall from Monday's high

Monday’s four month highs were short lived as Sterling fell against the dollar throughout Tuesday due to asset sales in Asia. Rates dropped by 0.5% from the start of the day to $1.5955 at the time of writing; however, losses were reduced by positive manufacturing and construction data that has gone someway to ease concerns over the UK economy.

Britain’s construction sector accelerated last month, with the number of orders being placed at their fastest rate in over four years. Coupled with the Monday’s data that UK manufacturing rose in March to 52.1 from 51.5 in February (a reading over 50 implies growth) reduced the risk of the UK heading back into a recession. It may also mean the Bank of England will hold off from further monetary stimulus which could devalue the pound against a basket of currencies.

The recent gains made by sterling against the dollar have been largely due to expectations for further quantitative easing in the United States. Later on today the Federal Reserve policy minutes will be released and will indicate the likelihood of more stimuli for the U.S economy.

If the minutes show the Fed is leaning towards further easing we could see pound/dollar rates push back towards the highs we saw during Monday’s session.

Tuesdays drop in rates saw a number of Stop Loss Orders being triggered; a Stop Loss allows clients to protect themselves from adverse movements in the market and allows you to budget affectively.

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