By TraderVox.com
Tradervox.com (Dublin) – The sterling pound dropped against the 17-nation currency after advancing for the last two days. The drop came prior to a gauge of UK manufacturing orders which is expected to show a drop in November. The UK currency has advanced to a two-week high against the dollar prior to the report which is expected to show that the Confederation of British Industry’s factory orders index rose from negative 23 to negative 20 in the previous month.
The drop against the euro came as the Bank of England Policy Makers including the Governor and the Deputy Governor testified to the Parliamentary Commission on Banking Standards. The country’s gilts remained little changed as the Debt Management Office prepares to sell index-linked bonds. According to Ian Stannard, a currency strategist at Morgan Stanley in London, despite the support the sterling is getting from the situation in euro zone, there are fundamental economic challenges that are preventing the currency from rebounding. He suggested that the market will be watching closely indicators such as CBI industrial trends.
The sterling has been among the gainers this year, advancing by 1.4 percent over the year. The euro has declined by 2.4 percent while the dollar has dropped by 1.5 percent. The yen has dropped by 7 percent over the same period.
The country’s ten-year benchmark yield rose by less than one basis point to 1.75 percent prior to the DMO sale of index-linked gilts due in 2044 through financial institutions in the country.
The sterling weakened against the euro by 0.3 to exchange at 80.65 pence at the start of trading in London today. The currency had earlier appreciated to its strongest level since November 14 of 80.06 pence. The pound remained little changed against the dollar, trading at $1.5950. It had rose to its November 9 level of $1.5978 yesterday.
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