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Forex pairs in this Article » GBP/USD (Barcelona) - Lee Hardman, FX Analyst at the Bank of Tokyo Mitsubishi UFJ notes that the pound has weakened modestly in early 2014 likely also reflecting some position adjustment after it continued to outperform in December.

Key Quotes

“The trigger of pound weakness yesterday was the release of the weaker than expected UK PMI manufacturing survey for December which revealed that business confidence amongst manufacturers declined by 0.8 point to 57.3.”

“The survey is still consistent with robust economic growth in the UK although does suggest that the pace of quarterly growth may ease somewhat in 2014.”

“That should not be too surprising given that the economy has been expanding at an annualized rate of just over 3.0% since the end of Q1 2013.”

“We expect real GDP growth of around 2.8% in 2014 as a pick up in construction activity, business investment and less of a drag from net trade helps offset a moderation in household consumption growth which has been running ahead of subdued real disposable income growth. The UK growth outlook should continue to prove supportive for the pound.”
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