Good afternoon,
Sterling slipped to a fresh three week low against the dollar today with GBP/USD exchange rates falling to $1.5173. The currency pair lost around a cent during the day's session and the move has now seen all of gains made by the pound since the UK Election result completely wiped away.
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Since the 15th May GBP/USD has dropped over 4% following a run of weaker than forecast data releases and unfortunately for the UK economy today was no exception.
Figures posted this morning showed the UK manufacturing sector expanded at a slower pace than predicted in May and is another blow following last week's GDP result.
The poor manufacturing number has added to investor belief that the Bank of England will keep interest rates at the current level for longer.
With expectations of a rate hike from the Bank of England dwindling the long term forecast for the pound has been dragged down, leaving the dollar in a position to take full advantage.
Despite a run of awful economic numbers coming from the U.S over the past few months there are still calls for the Federal Reserve to raise interest rates. Bets are still being taken on the central bank raising rates in September and if events continue on their current path GBP/USD could potentially fall even further.
A few weeks ago I thought we could see GBP/USD push towards or even break through $1.60. With the way the UK economy has been performing and events in Greece still helping the dollar I think GBP/USD will be lucky to hold above $1.50 in the coming month.
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