Sterling hits highest level in two weeks

Sterling reached its highest level in two weeks against the U.S dollar on Tuesday and for the first time since August the 23^rd cable broke through the $1.59 mark.

The pound shrugged off poor construction data released at the start of the day, UK construction Activity came in lower than forecast with PMI figures showing the sector had dropped from 50.9 in July to 49.0 in August. A figure under 50 shows the sector has contracted.

The reason behind cables rise this afternoon (Tuesday) was to the UK service Sector hitting its highest levels for 5 months. Official figures indicated a jump from 51 in July to 53.7 in August on the PMI index. This latest data could be seen as a sign the UK economy is improving and will have lowered expectations of a interest rate cut and further Quantitative Easing from the Bank of England when they meet on Thursday.

We could see further gains for the GBP/USD cross in the coming days if the European Central Bank announces a plan to reduce the borrowing costs of Italy and Spain when they meet later in the week. Any positive vibes from Mario Draghi could lend support to the single currency as investors leave the safe haven U.S dollar and return to the Euro.

If you are thinking of buying or selling dollars, the events in the next couple of days could mean a major swing in rates. If you want to know what contracts are available to protect you from adverse movements or take advantage of a sudden spike in the market click here to complete the contact form and take the next step in making the most of your currency transfer.