020 7898 0500With the US closed for bank holiday, all eyes were on the data released from the UK. The key Purchase Managers’ Indices (PMI) services data hit the wires and surprised to the upside, following on from the positive tone set last week. Resultantly, sterling made gains across the board, pushing to a six week high against the US dollar. The data released showed that UK’s services sector rebounded strongly in August suggesting that the shock “Brexit” vote fears are starting to dissipate. The figure continued the trend set last week, painting a rosier picture of the economy. The service sector number was by far the most important of the three PMI’s as it accounts for close to 80% of the economic activity in the country. The index rose increased by the largest ever month-on-month gain in the indicator’s 20-year history.
The main focus of the week for the UK is the quarterly inflation report. During these hearings the Bank of England (BOE) Governor and several Monetary Policy Committee (MPC) members testify on inflation and the economic outlook before Parliament’s Treasury Committee. The market will generally decipher the rhetoric for clues of future policy decisions. Given the surprising uplift in economic data of late, the timing of the latest interest rate cut and additional stimulus may be called into question.
If you are looking to buy or sell sterling, we suggest contacting your trader now for live rates, news and currency-purchasing strategies.
