The pound has taken another leg lower after a plethora of economic releases from the UK have seen more selling in the currency. Sterling briefly popped below 1.21 against the US dollar following the releases to trade at levels not seen since late October. The common theme of a falling currency and rising stock market of late has continued with the FTSE 100 rallying to post yet another record high.
Mixed data fails to support the Pound
Despite a better than expected reading for manufacturing production and the industrial equivalent, the pound has continued its descent today and is looking precipitous. Both these economic indicators came in above expectations but a decline in construction output and in particular the drop in the goods trade balance figure have caused concern for pound traders. Mark Carney is scheduled to testify before the Parliament’s Treasury Select Committee this afternoon and the Governor of the BoE has been coming under a fair amount of criticism lately for his decision to aggressively ease policy following the Brexit vote.
Supermarkets to pull of a clean sweep?
Following Aldi and Morrisons beating sales estimates over the Christmas period, Sainsbury’s has this morning released a stellar set of earnings which has seen the stock rise by over 5% to top the FTSE 100’s biggest gainers. Dixons Carphone (LON:DC), BT and Vodafone (LON:VOD) are also amongst the top performers on the UK blue-chip index. TUI shares have dropped by more than 4% to reside at the foot of the benchmark with the travel company seeing some sizeable selling. Fresnillo (LON:FRES) is also in the red this morning after the stock has enjoyed a strong ride higher on the back of a bounce in the price of Gold bullion over the past month.
Solid results bode well for recruiters
The health of the UK labour market received some support this morning as PageGroup announced a solid set of annual results. The recruitment firm that is listed on the FTSE 250 posted several highlights in their report including a record profit of £163.4M for the fourth quarter. This rise in earnings comes largely due to a 12.4% increase in the EMEA segment of the business, with the UK seeing a contraction of 6.7% due to heightened uncertainty in the market following the EU referendum.
Whilst the report overall is fairly robust, CEO Steve Ingham strikes a note of caution in his commentary warning that there are several uncertainties which could cause an adverse impact on the recruiter in 2017. The UK initiating Brexit, new economic policies in the US and elections in Europe are the main potential threats seen by Mr. Ingham this year, but he remains confident that the firm can continue to drive profitable growth.
The share price has now recovered virtually all of the declines seen following the Brexit vote, and this latest trading update will give investors several reasons to feel optimistic going forward.