CNY
In a surprise move on Friday the Chinese Central Bank cut its benchmark
one-year lending rate by 25 basis points to 4.35 percent and lowered big banks’
reserve requirement ratio by 50 basis points to 17.5 percent.
 
This move acted as a boost to equity markets and was seen as positive for the
US Dollar, as the stimulus to the Chinese economy increases the probability of
a US rate hike. Consequently, GBPUSD fell back, having pushed 7-week highs

CNY
In a surprise move on Friday the Chinese Central Bank cut its benchmark
one-year lending rate by 25 basis points to 4.35 percent and lowered big banks’
reserve requirement ratio by 50 basis points to 17.5 percent.
 
This move acted as a boost to equity markets and was seen as positive for the
US Dollar, as the stimulus to the Chinese economy increases the probability of
a US rate hike. Consequently, GBPUSD fell back, having pushed 7-week highs
earlier in the week. 
 
EUR
Sterling hit a two-month high against the euro on Friday, as the single
currency continued to struggle a day after ECB chief Mario Draghi told a news
conference that the central bank was “open to the full menu of monetary
policy”.  The ECB comments had gone further than the market had
expected by signalling that a deposit rate cut was possible, in addition to an
extension of the quantitative easing program. 
 
However there was a set of stronger-than-expected data releases from the
Eurozone early on Friday morning, including French services PMI, German
services PMI and Eurozone manufacturing, services and composite PMI data, but
none of which could abate the relentless pace of the euro’s slide following the
much more influential ECB announcement. 
 
USD
The US dollar climbed following the release of the October preliminary Markit
US Manufacturing PMI figure. The flash activity reading came in at 54, a higher
reading than the 52.9 expected.  It was also a five-month high for the
series with a marked contrast to some of the other manufacturing reports that
have been released recently.

There were improvements in both output and new orders volumes during October.
The orders component rose to 55.5 from 54.7 for the highest reading in seven
months. The employment measure similarly accelerated. Additionally, input costs
fell for the second month in a row.

Key
Announcements
09:30 – GBP: BBA Mortgage Approvals for September expected to rise from
last month’s print of 46.7k
14:00 – USD:New home sales for September expected to drop slightly to 0.550m
from 0.552m