Daily Digest Market Movers: Pound Sterling remains cautious ahead of FOMC minutes
- Pound Sterling remains inside the woods below 1.2600 as the market sentiment remains cautious.
- The Pound Sterling will be guided by the commentaries from Bank of England Governor Andrew Bailey and other Monetary Policy Committee (MPC) members on the inflation and the interest rate outlook before Parliament’s Treasury Committee.
- Andrew Bailey and his teammates are expected to maintain a hawkish narrative on interest rates as momentum in service inflation and wage growth is higher than what is required for bringing inflation down to the 2% target.
- Apart from that, robust Retail Sales data for January have indicated that the impact of hawkish stance on interest rates by the BoE is fading away.
- Also, an indication of higher spending by households would support the United Kingdom economy in coming out from a recession.
- Last week, BoE Chief Economist Huw Pill advised to remain patient for rate cuts as current inflation data is insufficient to convince that inflation will sustainably decline to the 2% target.
- Meanwhile, the near-term outlook for the Pound Sterling has strengthened. The weekly data from the Commodity Futures Trading Commission (CFTC) shows that speculators lifted their bullish sterling position to $3.971 billion in the week to Feb 13, just shy of last July's nine-year high, Reuters reported.
- This week, investors will focus on the preliminary S&P Global/CIPS Manufacturing and Services PMI for January. Expectations are for the Manufacturing PMI to rise to 47.5 from 47.0, while Services PMI to drop to 54.1 from 54.3 in December.
- On the United States front, the US Dollar Index, which gauges the Greenback’s value against six rival currencies, rebounded to 104.40 amid uncertainty ahead of FOMC minutes for the January policy meeting, which will be released on Wednesday.
- The USD Index struggles to deliver a strong recovery as Federal Reserve policymakers are confident that inflation is moving in the right direction despite hotter-than-anticipated consumer price inflation and the Producer Price Index (PPI) data for January.
Disclaimer: The content above represents only the views of the author or guest. It does not represent any views or positions of FOLLOWME and does not mean that FOLLOWME agrees with its statement or description, nor does it constitute any investment advice. For all actions taken by visitors based on information provided by the FOLLOWME community, the community does not assume any form of liability unless otherwise expressly promised in writing.
FOLLOWME Trading Community Website: https://www.followme.com
If you like, reward to support.
Hot
No comment on record. Start new comment.