Sterling little changed in a quiet Monday trade
There are no data releases from the UK today, with banks being closed in observance of Summer Bank Holiday. Sterling added few points after sharp decline last week. Economists have said the boost to trade might be temporary, because the persistent strength of sterling is making British goods more expensive abroad, while turmoil in Chinese financial markets has increased uncertainty about the global outlook.
Business investment rose 2.9% compared with the first three months of 2015 - the highest figure in a year. Household spending increased by 0.7%, but was lower than the 0.9% rise in the first quarter. Weak inflation, low interest rates and a strong pound have helped to keep consumer sentiment buoyant. The UK economy expanded by 3% last year in its best result since 2006. The Bank of England expects the same momentum to be maintained this year, forecasting 2.8% growth.
Business investment was also up strongly, growing 2.9% quarter on quarter, in a promising sign for UK growth prospects and productivity. George Buckley, chief UK economist at Deutsche Bank, said the details were “encouraging” but cautioned that the growth in exports might weaken given global economic uncertainties.
Sterling is currently being traded few points above 1.5410 level. Pair is likely to find support around 1.5350 handle and resistance above 1.5450 area. Later today, in the US session, Chicago PMI figures are scheduled for a release.
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