Good services data boosts sterling | Smart Daily Currency Note
The strongest day in many weeks for sterling, as Services PMI figures blew forecasts out of the water to post a sixth consecutive month of better-than-expected growth. The sector, which makes up 75% of UK GDP, is performing better than any other area and sterling climbed over a cent in the two hours around the release. Today is Mark Carney’s first day in the public eye with the rate decision, and asset purchasing facility announced. We’re unlikely to see any dramatic changes today – especially in light of the positive data emanating from the UK this week, what will be perhaps more insightful is the minutes from the meeting which are released in a fortnight. Nonetheless, markets will be nervous, and with trading volumes low nervousness is exaggerated into volatility so call your trader to find out where sterling is trading right now.
The US dollar had a torrid day yesterday in spite of solid labour data which showed that the private sector put an extra 188’000 workers in employment, whilst the number of new people claiming for unemployment related benefits fell. Despite this, speculation grew as to whether progress in the labour market is sufficient to justify a reduction in asset purchasing facilities. The trade deficit, the difference between imports and exports, increased dramatically last month to show that imports into the US are near all-time highs. Today the US celebrates Independence Day and banks will be closed. With traders away from their desks, markets will be much less liquid than usual, and therefore much more volatile. Call in for to-the-second live rates.