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FX round-up: Sterling plumbs new depths vs Euro

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Date: Thursday 06 Mar 2008

LONDON (ShareCast) - Sterling hit an all-time low against the euro in London as concerns about declining consumer confidence outweighed surprisingly strong PMI data relating to services sector activity.

According to a survey by the Nationwide Building Society, UK consumer confidence fell to its lowest level in the almost four-year history of the survey. Meanwhile, a survey from the Confederation of British Industry indicated that sentiment among UK service firms is at its lowest ebb in 15 months.

The economic data was probably not enough to persuade the Bank of England to cut interest rates when its Monetary Policy Committee meets tomorrow, but traders said the market is now anticipating three cuts by the end of the year.

In New York, the dollar was also fighting a losing battle against the euro, with the European currency trading at $1.5270, up 58 cents, having earlier risen above $1.53. Sterling also made headway against the greenback, advancing almost 60 cents to $1.9920.

The US currency came under pressure after the Federal Reserve’s “Beige Book” survey confirmed that economic growth has slowed down in 2008, with two-thirds of the 12 Fed regional bank districts experiencing a "weakening in the pace of business activity."

Meanwhile, a survey by payroll services company ADP revealed more gloomy news for the US economy as it indicated private sector payrolls fell by 23,000 in February, the first monthly decline since April 2003.

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