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Pound Sterling Weakens as Consumer Confidence Falls

By David Liu
29 June 2011 22:30 GMT

THE TAKEAWAY: Lower Consumer Confidence > Lower Spending and Growth > GBP Weakens

The GfK’s Consumer Confidence Survey for the United Kingdom for June failed to meet expectations, coming in at -25. Analyst expectations were recorded at -24, while the previous record was -21. Lower confidence may point to less consumption, possible slowing inflation and putting downward pressure on domestic growth, cutting expectations for a rate increase.

Pound_Sterling_Weakens_as_Consumer_Confidence_Falls.doc_body_Picture_5.png, Pound Sterling Weakens as Consumer Confidence Falls

UK GfK Consumer Confidence Survey. Chart generated with Bloomberg LP Professional Terminal.

The British pound sustained mild losses immediately after the report on the weaker report. However, confidence from the Greek parliament’s passage of its next budget, kept the dollar under pressure. Although at the time of writing US equity futures were trading moderately lower, the New Zealand dollar were leading other commodity currencies higher, rising 0.291% versus the greenback this morning. The pound sterling is currently shedding 0.011% this morning against the buck.

Pound_Sterling_Weakens_as_Consumer_Confidence_Falls.doc_body_Picture_6.png, Pound Sterling Weakens as Consumer Confidence Falls

GBPUSD 5 minute chart; vertical line indicates time of data release. Chart generated with FXCM Strategy Trader.

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29 June 2011 22:30 GMT