020 7898 0500What a difference a day makes. A positive week for sterling which had seen it make gains, especially against the euro where it had hit a three week high on Wednesday, went into reverse on Thursday as the European Central Bank confirmed that they were going to sit on their hands until the New Year with regard to quantitative easing. This highlights how quickly sentiment and exchange rates can change especially in the build up to Christmas and the importance of keeping in contact with your Smart trader.
The release this week of Novembers Purchasing Manager Indices {PMI} for Manufacturing, Construction and Services had been broadly positive with only the Construction PMI data disappointing. The positive nature of the Services PMI data, which is the key constituent of the UK economy, had, as already noted, boosted sterling to a three week high against the euro but it also gained ground across the board, even against the US dollar where sterling was also supported by a slight fall in US ADP non-farm payrolls. Thursday saw the Bank of England keep interest rates on hold which was very much as expected.
Today promises to be relatively quiet for sterling, with the majority of economic data set to be released from the US. Non-farm unemployment figures are often a highly volatile figure, and any significant deviation from the forecast level could see movement in US dollar markets, which could affect sterling strength.
