British Pound Still Struggling to Hold Onto Its Gains

Despite stronger economic data and a broad rally in carry trades, the British pound is still struggling to hold onto its gains.

Nationwide house prices dropped by 0.1 percent in the month of January which was less than the market expected while the Gfk Consumer Confidence survey rose from -14 to -13. UK manufacturing PMI is due for release tomorrow. We continue to expect a major turn in the British pound because if the currency can not rally on stronger economic data or a rise in risk aversion, it may not even be lifted by weaker US data.