Pound bounces back

The pound recovered some of its losses today against the US dollar as more weak data out of America pushed back expectations of a rate hike from the US Federal Reserve.

At 9.49(GMT) the British currency was trading at$US1.4400 up from $US1.4360 at close of trade on Friday.

The latest empire state manufacturing survey hit the market today at -9.02 against analysts’ expectations for a number of 7.25 and well below last month’s figure of 9.56.

A number below 0 indicates that the sector is in contraction mode.

The disappointing data fueled speculation that the US Federal Reserve may hold their horses on raising interest rates with some now predicting that a cut in rates is even possible which was unthinkable just a few months ago

The real test will be tomorrow when the latest CPI figures from the US are released to the market with disappointing figures all but sure guaranteeing the Fed will keep rates on hold for the rest of the year.

Wednesday’s minutes meeting will also be closely watched for clues on the US central bank’s future movements and volatility is expected in the British pound.

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