Pound remains steady
The pound was broadly steady on Monday ahead of a key Bank of England interest-rate decision later this week that many analysts see as too close to call. While weak economic data and dovish comments from Bank of England Policymakers have fuelled speculation that the central bank could cut rates as its 30th January policy meeting, upbeat economic numbers in recent days have cast doubt on that view.
Friday’s early readings of the IHS Markit/CIPS UK Purchasing Managers’ Index (PMI) showed Britain’s vast services sector returned to growth in January for the first time since August, while a downturn in manufacturing eased, providing an argument against lowering interest rates. Analysts noted that market positioning data released on Friday by the US Commodity Futures Trading Commission suggests that while speculators have slightly cut their net long sterling positions, they still maintain an overall long position on the pound.
The US dollar index, the Japanese yen and the Swiss franc rose on Monday morning, while the offshore yuan tumbled to a 2020 low as growing fears about the spread of a coronavirus from China pushed investors into safer assets.
Health authorities around the world are working to prevent a pandemic. The virus has killed 81 people in China, and nearly 2,800 people have been infected globally. Chinese Premier Li Keqiang will ‘inspect and direct’ efforts to control an outbreak in the central city of Wuhan and promised reinforcements, as people accused provincial authorities of being too slow to respond.
15.00 – USD: CB Consumer Confidence; Forecast at 128.2 against previous of 126.5.
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