The Pound Sterling capitalizes on risk-on mood and rises to 1.2660.
UK’s upbeat Manufacturing PMI data and increasing home prices suggest that the recession in the second half of 2023 was shallow.
The US NFP data will guide the next move in the US Dollar.
The Pound Sterling (GBP) aims to extend its recovery above the one-week high of 1.2660 in Thursday’s London session. The GBP/USD pair exhibits strength as recent economic indicators in the United Kingdom have shown that the economy is on track to return to growth after falling into a technical recession in the second half of 2023. Meanwhile, a weaker US Dollar due to the poor United States Institute of Supply Management (ISM) Services PMI data for March also boosted the Cable.
The UK’s Manufacturing PMI surprisingly expanded in March after contracting for 20 straight months, driven by robust domestic demand. Strong UK factory data propelled business optimism to its highest level since April 2023, with 58% of manufacturers expecting their production level to increase over the coming 12 months. In addition, British house prices rose 1.6% in March, the highest pace since December 2022, suggesting that the real estate sector is holding up despite historically higher interest rates.
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