GBP/USD Sinks To Lowest Level In 31 Months, Triple Dip Recession Fears

The GBP has hit its most disappointing level in 31 months after weak data releases, and concerns abound at the country’s potential growth. The PMI index in the UK, which was expected to grow to 51.0 in fact sunk to 47.9 in February from 50.8 in January, an unexpectedly low reading. Elsewhere, the Bank of England informed us that net lending dropped to £0.6 billion in January from £ 1.8 Billion, a huge decrease in lending to individuals. Expectation had been a drop to £1.1 billion. This also comes after Wednesday’s data revision, which showed that the UK economy shrunk by 0.3per cent in the last quarter of last year. The weak data seems to reinforce investors’ fears over a coming triple dip recession in the UK, which is backed up by Moodys downgrading of the UK from AAA status last week.

In this morning European trading session the GBP/USD pair touched the low of 1.5054 and the high of 1.5186 at the time of writing.

Stocks

Europe
European stocks were broadly higher today after the relsease of positive manufacturing figures for Spain, while investors keenly watch the outcome of the Italian political instability and worries over US budget talks.

This morning EURO STOXX 40 inched up by 0.13per cent, the French CAC40 up by 0.20 per cent and the German DAX 30 up by 0.24 per cent. The Spanish PMI rose to 46.8 in February from 46.1 the previous month. Expectations had been an increase of 46.5.

Asia
The worrying PMI data from China affected Asian stock indexes. In the Asian trading session, the Japanese NIkkei 225 gained by 0.06 per cent following data that the Japanese CPI rate remained unmoved. This was anticipated by investors. Japanese Household spending figures for February were rosy, gaining 2.4 per cent from January’s figure of -0.3 per cent. Expected figures of growth were just 0.3per cent.

Hong Kong Hang Seng dropped 0.31per cent and the Shangahi Composite Index fell by 0.54 per cent after the Purchasing Managers Index figures fell 0.54per cent from 50.4 in Janaury to 50.1. Expected figure was 50.5, signaling a cross over to expansion.

The Australian S&P/ASX 200 lost 0.4 per cent.

US
Gains that had been seen throughout the day in US trading on Wednesday were wiped clean by final hour trading. The DJIA closed down 0.15per cent, S&P 500 finished 0.09per cent down and NASDAQ was down 0.07 per cent. Even with this close of trading, the overall stock prices for the month of February remained positive. Various data indicated a positive picture for the health of the US economy, including jobless claims and manufacturing activity data.

Forex
The USD traded lower against its counterparts in Asian trading today. The EUR/USD pair gained 0.10per cent to 1.3071. The USD/JPY fell 0.01 per cent to 92.56. The GBP/USD pair gained 0.05 per cent to 1.5172 in Asian trading session, and the USD/CHF stayed at 0.9366. The USD/CAD dropped by 0.09per cent 1.0299. The AUD/USD pair gained 0.13per cent, and the NAZ/USD finished up by 0.18 per cent.

Commodities
Oil traded lower in Asian session with a drop of 0.42 per cent to $91.67 a barrel. Gold traded higher, with a rise of 0.23per cent for April delivery to $1581.70 troy oz.