The Sterling goes below $1.60 against the Dollar as UK manufacturing come out we

The Pound extended its losing streak on Wednesday against the greenback after weak UK manufacturing output data the previous day further undermined optimism that the economy may be recovering. Disregarding figures on Wednesday showing a rise in British consumer confidence, the UK currency continued to decline from Tuesday's unexpected fall in manufacturing output, and was on track to lose for a fifth straight day. "There was some consumer confidence data earlier today which was stronger, but the main issue is the manufacturing figures from yesterday, which is keeping sterling weak," said Adarsh Sinha, currency strategist at Barclays Capital in London. The GBP/USD is currently trading at $1.6105 as of 8:30am, London Time.

The Japanese currency fell against the dollar on speculation Japanese importers sold the currency. The yen weakened versus all of its 16 major trading-partners after a Japanese government official said excessive currency movements were undesirable, fuelling speculation the nation may intervene to limit the currency’s gains. The greenback and the JPY also fell as U.S. stocks advanced and the International Monetary Fund said the global recovery next year will be stronger than it forecast in April, encouraging investors to buy higher yielding assets. “The firm undertone of stocks in Asia means the global economy is not falling apart, even if it is not recovering at the strong pace the market had hoped for,” said Akio Yoshino, chief economist in Tokyo at Societe Generale Asset Management (Japan) Co. “Given the assumption that the global economy will continue to grow, albeit at a slow pace, there is no reason to keep buying the yen as a haven.” The USD/JPY is currently trading at 93.30 as of 8:40am, London Time.

The global economy is slowly starting to recover from its deepest recession since World War II but a recovery will be slow and policies need to remain supportive, the International Monetary Fund said on Wednesday. In an update of its World Economic Outlook, the IMF said the global economy is likely to contract 1.4 percent this year, a touch steeper than the 1.3 percent decline it projected in April. "This leads us to predict that while the world economy is still in recession, the recovery is coming but it is likely to be a weak recovery," Blanchard told a news conference.

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