Daily digest market movers: Pound Sterling recovery stalls
- The Pound Sterling ranges slightly below 1.2600 against the US Dollar (USD) ahead of key events. Investors shift focus to the speech from Federal Reserve Chairman Jerome Powell, which is expected at 16:10 GMT, and the United States NFP data, which will be published on Friday.
- The speech from Fed Powell could provide more cues about when the central bank will start reducing interest rates. Currently, investors expect that the Fed will start reducing borrowing costs from the June meeting. The US Dollar Index (DXY) retreats from a fresh four-month high of 105.10. In today’s session, investors will focus on the ISM Services PMI and the ADP Employment Change data for March.
- On Tuesday, the upbeat S&P Global/CIPS Manufacturing PMI for March supported a rebound for the Pound Sterling. The agency reported that the Manufacturing PMI returned to expansion after contracting for 20 straight months. The Manufacturing PMI rose to 50.3, above the 50.0 threshold, beating expectations and the prior reading of 49.9.
- Apart from the strong recovery in the Manufacturing PMI, British house prices rose 1.6% in March, the highest pace since December 2022. The activity in the housing sector has picked up despite the Bank of England maintaining interest rates at higher levels.
- A strong recovery in the manufacturing and real estate sectors suggests that the recession in the second half of 2023 was likely shallow and that the economy has returned to growth. In such a case, the BoE could achieve a so-called “soft landing” – a situation when an economy gets inflation under control without triggering a recession.
- Going forward, investors will focus on the S&P Global/CIPS Services PMI final data for March, which will be published on Thursday. The Services PMI is forecasted to have remained unchanged from its preliminary reading of 53.4.
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.