Pound loses ground to USD

The pound fell in relation to the US dollar Tuesday on new data from the Chartered Institute of Purchasing and Supply which showed that while its services index saw a gain in the latest numbers, the sector remained in contraction and after the Office for National Statistics said that factory output was down in June, making a UK interest rate increase unlikely this year.

The pound traded at $1.9553 to the US dollar but gained ground on the euro, to 79.17p.

The US dollar strengthened against several global currencies Tuesday as the Federal Reserve was expected to hold interest rates steady but indicate that inflation is a risk, implying future rate hikes and on commodities prices that have fallen significantly in recent days.

The greenback traded at $1.5480 to the euro in morning trade in New York, while at the same time the Canadian dollar was down at C$1.0516 to the dollar and the Norwegian krone traded at kr5.1851 to the greenback, both weakening on declines in oil prices, while the South African rand dropped to $7.3925 to the dollar as gold and platinum prices went lower.

Both the Australia and New Zealand dollars were lower on indications from the governors of the Reserve Bank of Australia and the Reserve Bank of New Zealand that their Banks could cut interest rates before the end of the year and after the RBA held interest rates at 7.25 percent for the time being, as it had been expected to do.

The Aussie was worth 91.69 cents US at late morning in New York, while the kiwi was at 72.63 cents US and traded at ¥78.479.

The yen saw more gains on the day as it traded at ¥108.1150 to the US dollar and at ¥167.3620 to the euro.

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