The Pound rallies again on bad news? Why?

by Damian George | February 24, 2009 at 10:13 am

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Foreign Exchange - Pounds Sterling and Euro Exchange Rate Outlook

In the UK, the government statistics office reported that investment by manufacturing and non-manufacturing companies in the three months to December fell an estimated 3.9% q/q and 7.7% y/y. Combining both private sector and public sector investment, the drop was 11% q/q and 15.7% y/y. This is huge. The ONS also revised downward the investment in calendar Q3 to –2.1% (from –1.3%).

That was the bad news.

Also bad were job losses at retailers, reported in the CBI survey, down at a record pace. The employment index fell 49% from 16% in the Nov quarterly survey. But the Feb sales balance was a lot better, only –25% after –47% in Jan.

The expected sales balance was also less bad, -33% from – 52%.

This was seen as sterling favorable for reasons that escape us.

Pounds to US Dollars = 1.4340
Pounds to Euros = 1.1275
Euro to Pounds = 0.8865
Pounds to Australian Dollars = 2.2100

Bye For Now

Barbara Rockefeller