Forex News, Fundamental Analysis Forex
October 22, 2012 @ 11:42 am

British pound lifted by hopes of UK economic recovery

UK data helped lift sterling off a three-day low against the dollar during the European trading session today. An industry report released in London this morning revealed that the number of U.K. business insolvencies fell 3.1 percent in September from last year,  as more business managed to stay afloat.  Hopefully this proves that business activity is picking up in the sluggish British economy.

The data today comes after a series of better than expected data recently on stronger UK sales volumes, a lower public sector budget deficit as well a improved employment data. Last week data showed the number of Britons with a job rose to the highest level on record.

The improved data give confidence to investors who are expecting UK GDP data to show the economy grew in the third quarter of 2012 after three consecutive quarters of contraction.

Better-than-expected data dampened expectations that the Bank will embark on a further round of quantitative easing. Usually this type of stimulus means as increase in money printing which is generally seen as negative for a currency as it increases its supply.

The pound rose 0.2 percent to around $1.6034 $1.6034 by 11:44 a.m. London time, up from last week’s  0.4 percent drop.

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