Late European session the pound dropped 0

The publication of an indicator of better activity than expected in the United States has temporarily slowed the fall of the pound sterling, who, like the euro, tends to take advantage of the positive with respect help news emanating from the world's largest economy. But the winds picked up the top and the British currency has continued almost uninterrupted slide since August 20. Late European session, the pound dropped 0.79, to 1,6155 dollar.

"The pound is defined as a financial currency", recently reminded the former strategist for Morgan Stanley Stephen Jen, currently in BlueGold Capital Management. "The outperformance since March is in part to the recovery of the financial sector in the stock market."The correlation is checked again yesterday, while the risk aversion dominated markets. The index of the London Stock Exchange, the Futsee, declined by 1.82, to 4.819,70 points.

But the malaise is also perhaps deeper and more related to the economic fundamentals of the United Kingdom. Yesterday, a cyclical indicator threw a cold. Foreign exchange dealers reacted badly to the publication of the manufacturing sector index, collapsed under the threshold of 50 points, which defines the level of expansion and economic contraction. The surprise was all the more bitter the barometer had crossed upward cap of 50 points in July, which had fuelled hopes of an out of the crisis faster than expected. "The relapse of the PMI at the United Kingdom index leaves also fear a similar phenomenon in other countries of the euro area", j. Ian Stannard at BNP Paribas. Other little pleasing figures enamelled day, still slightly increasing the pressure on the pound sterling.

Shopping policy

Strategists are shared. Paul Mackel, at HSBC, believes that the British currency suffered only a transient pressure and resume the cap of 1.75 dollar in 2010, after the near year of 1.62. "The market looking for faults in the British resumed and, yesterday, he found a", provides. On the contrary, the team of BNP Paribas judge that the horizon darkens. "The choice of economic, fiscal and monetary policy in the United Kingdom will weigh on the currency, particularly in view of the elections next year," said Ian Stannard. According to him, will have no alternative but to maintain a highly accommodative policy the Bank of England (BoE). It also created the surprise early August, by extending its program to purchase of financial assets on the market. This is not a chance if the pound reached its annual Summit August 5 over 1.70 dollar - before beginning a phase of strong enough correction. Non-conventional measures of the central banks are regarded as generators of inflation in the term and normally weigh in the short term on the currency. In the case of the BoE, the issue is more serious still because some feel that credibility can be questioned.

After the enthusiasm generated by signs of recovery in recent months, caution seems to prevail. British Prime Minister and the Governor of the BoE are themselves seeking to calm the fervour. "The British authorities are more on their guards, because their economy is structurally more vulnerable than that of the United States," said Mohamed el-Erian, at Pimco, one of the largest Fund in the world. "It is to be hoped that they between excess of pessimism, but better to go on the idea that they are realistic."