The Great Britain pound erased its earlier gains versus the US dollar and fell against the euro and the Japanese yen today on poor fundamental data and lack of demand for the safety of the currency. Earlier, the sterling reached a monthly high against the greenback.
The construction Purchasing Managers’ Index fell from 50.9 in October to 49.3 in November (adjusted for seasonal factors), indicating decline of the sector. Analysts have though that the index would stay little changed at 50.7. As for good news, British Retail Consortium reported that retail sales grew 0.4 percent in November from a year ago.
Concerns that absence of safety demand would weaken the sterling proved true. The positive outlook for the eurozone means that investors are willing to part with the UK currency that they were buying as a refuge from the European crisis.
GBP/USD traded at 1.6091 17:21 GMT today, following the advance from 1.6088 to 1.6129 — the highest rate since November 2. GBP/JPY slid from 132.31 to 131.58 and EUR/GBP ticked up from 0.8110 to 0.8128 — the highest settlement since October 24.
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