Sterling rises following positive PMI figures
Sterling moved higher on Friday as the odds of a January interest rate cut in the UK fell following an uplift in UK data.
The flash release of Markit Services data showed growth for the first time since August reaching 52.9, whilst a downturn in Manufacturing eased.
Sterling’s reaction was mixed. The GBP-EUR rate benefited from the positive data release and moved to month highs to 1.1901. However, the GBP-USD rate was relatively subdued and held at 1.3075. It’s likely that the USD, firmed as safe haven demand, grew following the outbreak of the Coronavirus.
Investors were monitoring the data release closely as earlier this month it had prompted three Bank of England Policymakers to hint at an interest rate cut.
Despite the upturn in Friday’s data for the UK, money markets are still pricing in a 50% chance of a rate cut this week.
Key announcements None.
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