Surprising the market, consumer confidence remained relatively positive for the month of August, keeping the prospects for pound appreciation good for the moment. Expected to dip to a negative 7 reading, the report according to the GfK Group, actually improved to a negative 4 print.
The figure was especially positive when considering the myriad of negative situations that have emerged over the past month for the economy. Aside from declining stock market valuations, the UK has been hit by strong floods and a bout of foot and mouth disease. However, both situations weren?t able to dampen the spirits of the British spender as it seems that current economic assessments remain positive on rising wages and strong employment. The pound bullish sentiment should continue into next week as investors look to the possibility of another round of monetary tightening by the Bank of England when they issue their decision in midweek action.
Written by Richard Lee, Currency Strategist of DailyFX.com