The pound’s losses accelerated after the US open, the bottom completely falling out of the currency as it not only dealt with the latest dovish data from the UK, but the dollar’s own growing confidence.
Though the FTSE once again shied away from breaking through 7550, its gains instead more than halving to just 0.2%, this wasn’t due to any sterling resurgence. No, as soon as US investors got involved things got a lot, lot worse for the pound.
Cable plunged 0.9% as Tuesday went on, a sharp drop at least partially informed by the UK’s 17 month low manufacturing PMI, but also the dollar’s somewhat inexplicable recent comeback; that shift left sterling straining to keep its head above $1.36, flailing at its lowest levels since January 12th. The pound fared a tad better against the euro, but even then ‘better’ in this case still constitutes a 6 week low.
At least sterling wasn’t alone in its dollar-drubbing. The euro also suffered heavy losses against the greenback on Tuesday, the single currency falling 0.7% to a hit a similar near 16 week nadir as its UK peer.
The Dow Jones really, really wasn’t happy with the dollar’s rediscovered hutzpah. Diving 200 points the Dow dropped under 24000 to tease levels not seen in a month. And this is all before the week’s dual main-events occur: Wednesday sees what will likely be a hawkish, if uneventful, Fed meeting, while Friday sees the non-farm jobs report, and with it the chance of the unemployment rate hitting 4.0%. The Dow , then, could do with a decent set of figures from Apple (NASDAQ:AAPL) this evening.
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