Sterling falls in response to UK Services data

London, 3 Feb 2010, (Travelex Global Business Payments)
Travelex Market Analysis

Bolsom says investors are ‘reminded of the economy’s fundamental weakness’

Sterling slipped against the euro and US dollar this morning, after data revealed that Britain’s services sector had slowed more-than-expected last month. Many businesses blamed the 2 point decline on snow-induced disruptions.

Sterling dropped to $1.6019 against the dollar from around $1.6052 and against the euro fell to a day low of 87.53 pence, compared with 87.37 pence before the announcement.

Mark Bolsom, Head of the UK Trading desk at Travelex, the world’s largest non-bank FX Payments Specialist, said “This data will remind investors of the UK economy’s fundamental weakness and that any growth remains marginal. A double dip recession remains a distinct possibility. Certainly the services sector did not expand as expected and we have not seen the roaring recovery that Labour promised early on at the beginning of the recession.

“With mixed data continuing to exacerbate investor concerns about the health of the economy, it is unlikely that they will be taking long-term positions on the pound for quite some time. All eyes remain on the Bank of England’s decision tomorrow – however, we expect that sterling will still suffer even if quantitative easing is ceased, as the budget deficit looms over us.”

Bolsom continues, “This data also confirms that the recession continues to have a negative impact on the consumer. They are still feeling the pinch and can’t afford to spend lavishly.”

ENDS

Media enquiries
Jessica Buttress
Head of PR for Travelex Global Business Payments UK

Tel: 0208 415 4204
Mob: 077954 497129

Email: jessica.buttress@travelex.com.

Notes to editors

About Travelex

Founded in 1976, Travelex is the world’s largest non-bank foreign exchange and payments specialist; with operations across four continents and 6,000 employees worldwide.
Travelex holds key positions in its three main areas of activity: Global Business Payments (TGBP), Currency Services and Card and Mobile Payments. Every year, more than 35,000 corporate clients and 30 million customers trust Travelex to manage their foreign exchange requirements.

Recently recognised by TowerGroup research as Industry Leader for payments innovation for SMEs, Travelex currently handles international payments worth £40 billion annually for over 750 large corporate and financial institutions.

Visit www.travelexbusiness.com/uk for more information or email the press office at jessica.buttress@travelex.com