Sterling renewed its 8-month high
Consolidation observed in pound/US dollar from the beginning of this month ended up, hitting the new high at 1.6743. But the bearish triumph continued not long. Reported UK data on GDP was much worse than expected and led to take profit. The breakdown of UK GDP in the first quarter was the worst since more than 50 years. According to adjusted data economic activity in the first quarter dropped by 2.40% that was corresponding to that of the second quarter of 1958. As compared with the analogical period of the last year GDP contracted by 4.9%.
Economists awaited GDP contraction in the first quarter by 2.2% as compared to that of the last quarter and by 4.4% in comparison with the analogical period of the last year. Q1 current account level fell to 3.% against 4.0% in the forth quarter of 2008 that is conditioned by the drop in salary. Home expenditures in the first quarter fell by 1.3% against the last quarter. The figure was the largest reduction since 1980 year. Home net income fell 2.4%. On this back pound/dollar returned to the level at 1.66.
The euro was a little up against the dollar on the support of economic data and growing interest in risk appetite. In June economic confidence index in the euro zone rebounded more than expectations, so the stabilization of consumer sentiment, service sector and industrial production compensated fall in retail sales.
U.S. dollar/Japanese yen fell again under the level at Y96.0 to the support level at 95.30/50 as reported data showed Japanese home spending increase and growing Manufacturing Purchasing Manager Index in Japan. Nevertheless lowering pressure on USD/JPY is being strengthened. There is risk for greenback to expend losses to Y93.50-92.0.
