Tuesday saw the English pound absorb its sharpest drop in three weeks against the world's reserve currency as a consequence of underwhelming manufacturing information released by the U.K., Bloomberg reports.
The monetary unit also slumped against all of its other top 16 counterparts following the release of data in a British Purchasing Managers' Index, which was more than forecast by economists and analysts. As policy makers with the Bank of England are slated to meet this week, preoccupations are growing about the possibility of the region's capacities to endure a double-dip recession.
"People are less than optimistic on the U.K. at the moment," fixed-income strategist Simon Peck with Royal Bank of Scotland Group Plc in London told Bloomberg on Tuesday. "There's also a policy meeting this week so the time is ripe for more speculation on potential further quantitative easing. What's going on in Cyprus is also helping safe-haven flows and the bid for gilts."
Not since early last month have the pound's losses been as steep as they were on Tuesday against the U.S. dollar.
Though the PMI rose to 48.3 in March after registering at 47.9 in February, the metric remains lower than 50, which indicates contraction, according to Reuters.
This material is conveyed as a solicitation for entering into a derivatives transaction.
This material has been prepared by a Daniels Trading broker who provides research market commentary and trade recommendations as part of his or her solicitation for accounts and solicitation for trades; however, Daniels Trading does not maintain a research department as defined in CFTC Rule 1.71. Daniels Trading, its principals, brokers and employees may trade in derivatives for their own accounts or for the accounts of others. Due to various factors (such as risk tolerance, margin requirements, trading objectives, short term vs. long term strategies, technical vs. fundamental market analysis, and other factors) such trading may result in the initiation or liquidation of positions that are different from or contrary to the opinions and recommendations contained therein.
Past performance is not necessarily indicative of future performance. The risk of loss in trading futures contracts or commodity options can be substantial, and therefore investors should understand the risks involved in taking leveraged positions and must assume responsibility for the risks associated with such investments and for their results.
Trade recommendations and profit/loss calculations may not include commissions and fees. Please consult your broker for details based on your trading arrangement and commission setup.
You should carefully consider whether such trading is suitable for you in light of your circumstances and financial resources. You should read the "risk disclosure" webpage accessed at www.DanielsTrading.com at the bottom of the homepage. Daniels Trading is not affiliated with nor does it endorse any third-party trading system, newsletter or other similar service. Daniels Trading does not guarantee or verify any performance claims made by such systems or service.