After a brief respite on Wednesday, thanks to that better than forecast UK services PMI, sterling has resumed its October slide this Thursday.
While there was nothing concrete driving the pound lower, there was plenty of news to chip away at the currency’s confidence. There were the lingering effects of Standard & Poor’s comment yesterday stating that it is ‘sceptical’ of a Bank of England rate hike. Keeping with the BoE, deputy governor Sam Woods argued that a transition deal with the EU would need to be in place before Christmas to prevent an exodus of City jobs out of the UK.
Then there was the report that car sales may have fallen 10% in September, leaving the UK industry on track for its first annual decline since 2011. Along the same big ticket item lines, DFS Furniture (LON:DFSD) revealed a 22% drop in full year pre-tax profit to £50.1 million, the latest sign that the retail sector is struggling, and another gut punch to the sofa-seller, which fell 5% after the bell.
Add on top of all this Brexit – just, like, in general – and it’s not hard to see why sterling is continuing to given back chunk after chunk of September’s surge. Cable was down by 0.4%, taking sterling below $1.32 for the first time in over 3 weeks, while against the euro the pound plunged half a percent, leaving it to teeter just above €1.12.
Despite the size of sterling’s slide, the FTSE only managed to post a slight 15 point rise after the bell. That leaves the UK index tickling 7490, admittedly its best price in 2 months.
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