GBP/USD slips in early trading




Sterling has started the week badly falling against the USD and the EUR. On Friday the pound managed to move over 1.52 against the USD following news that an opinion poll indicated an outright Conservative majority - if Sterling could vote it would vote conservative! However the weekend polls have again pointed towards a hung parliament helping to soften the pound. In addition we had UK Right move house price data which did not paint a good picture for the housing market. In addition the ratings agency Moody’s affirmed that the UK’s fiscal position has been subject to “extreme deterioration”, which was negative for the pound. However they did affirm that the UK is still a long way from anything that would prompt a ratings outlook change. They also commented that the post election budget will be of much greater importance than the March 24th budget. Although the pound remains for now over 1.50 against the USD, the fact that it could not sustain a move over 1.52 maintains the bearish trend.



For the week ahead we have various feedback from central banks with minutes from the BoE, FOMC and the Reserve Bank of Australia. In addition for the UK we have the recently famed Public Sector Net borrowing, mortgage approvals, jobless claims and unemployment. It is difficult to foresee any positives in the upcoming data for sterling, hopefully the data will be a case of damage limitation.