Pound down as us dollar climbs

Photo: Images_of_Money

The pound has continued to weaken this week as the US dollar grows in strength. Data from Markit Economics showed that services growth had slowed down in September, a result that compounded speculation that the UK economy could be cooling. The Purchasing Managers' Index arrives after record highs in sterling's value this year, as the UK economy has fared favourable compared to the struggling euro.

Nonetheless, while it stays steady against the single currency, the pound is underperforming versus the stronger US dollar, slipping 0.5 per cent today, reports Bloomberg, the biggest drop in several weeks.

In America, new figures from Bloomberg's survey of economists suggested that US employers had added an additional 215,000 jobs in September - the highest number in three months, as the economy continues to improve.

"We’ve taken our dollar forecasts higher pretty much across the board,” Ian Stannard,head of European foreign-exchange strategy at Morgan Stanley, told the news agency. "The market is expecting a good payrolls number. We’ll see the dollar well supported into the data."

As a result, the dollar has improved against the yen, while Japan's currency fell versus most of its major counterparts. The US dollar is also forecast to strength to $1.14 per euro by the third quarter of 2015.