Sterling lacks direction – 11th May 2016

 

Sterling lacks direction

There was some movement in exchange rates yesterday but they weren’t always obvious. In Sterling’s case it managed an upward drift during the morning followed by an direction-less wander after lunch which, overall, was enough for Sterling to end the day in second place, just in front of the Canadian and Australian Dollars tied for third.

Investors found no fault with UK trade figures that showed a smaller-than-expected deficit in March, taking Sterling 0.2% higher against the other dozen most actively-traded currencies. Following the Brexit panic, Sterling has recovered by an average of 3%.

 

At the top of today’s data calendar are Britain’s data for manufacturing and industrial production. Small monthly rebounds are expected to leave both measures lower on the year.

The monthly changes in UK production have been, to say the least, erratic in recent months. February’s -1.1% decline in manufacturing was the biggest in three years and the predicted 0.3% increase for March would still leave output -1.9% lower on the year. Good strong numbers would be helpful to Sterling but investors are not holding their breath.