Pound dips further against dollar

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Published: Friday 13th March 2015 by The News Editor

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The pound fell to a near-five year low against the US dollar today after official figures showed a dismal start to the year for the UK’s construction industry – even as sterling remained close to seven-year highs against the euro.

It means consumers preparing to book summer holidays will face pricier sunshine breaks in Florida while their pound will buy them more in the Costa del Sol.

However the relative strength of Britain’s currency has a different impact on manufacturers, who will find their goods are less attractive for customers in the eurozone, the UK’s biggest trading partner – though cheaper in the US.

The pound fell two cents against the greenback and dipped below 1.47 during the session, a level not seen since June 2010.

America’s currency has been strengthening after expectations of an interest rate rise in the US were bolstered by strong jobs figures last week.

Sterling was dented today after official figures from the construction industry showed an unexpectedly poor start to the year with output down 2.6% in January.

Construction output is now 3.1% below the level of a year ago, which is the first time that a year-on-year decline has been registered since May 2013.

The pound has also come under pressure following remarks by Bank of England governor Mark Carney that pushed back expectations of an interest rate hike as policy makers guard against the threat of prolonged low inflation.

But sterling has been climbing against the euro and topped the 1.42-mark earlier this week, its highest level since November 2007. It was just above 1.40 today.

The single currency has been weakened by the European Central Bank’s 1.1 trillion euro (£780 billion) asset purchase policy designed to prop up the stuttering eurozone economy.

Published: Friday 13th March 2015 by The News Editor

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