Sterling struggled on Friday as poor PMII data stunted any upside in the session. The UK’s final Markit/CIPS Composite PMI was forecasted at 55.8 but came in at a disappointing 55.4. November’s UK Services PMI also missed expectations by 0.3, coming in at 58.5. The Euro also suffered losses on Friday due to unfavourable data. Despite German services firms seeing a meagre improvement in business activity, both Composite and Services PMI’s for Germany printed figures below forecast. Phil Smith of IHS Markit said that the “fourth wave of coronavirus already weighed on inflows of new work and business confidence in November while the Omicron variant is now adding further uncertainty with the risk of stricter containment measures”. He added that “the German economy is therefore set for a notable slowdown in growth, if not a stagnation in the final quarter”.
EURUSD returned above 1.13 on Friday. The pair started the session at 1.1290 and closed the week at 1.1308.
GBPEUR in contrast made a loss on Friday. After opening at 1.1757, the pair went on to shed over 50 pips, finishing the day at 1.1702.
GBPUSD also made a loss to finish the week. Cable started Friday at 1.3274 but closed at 1.3233.
The US in contrast had a mixed day on the data front. Despite Non-Farm Payrolls missing expectations and Labour earnings dropping, Unemployment Rate came in 0.3% under forecast and ISM Non-Manufacturing PMI published a record high of 69.1. November’s PMI number is the “highest reading since the series started in 1997”. The Services sector accounts for over two-thirds of US economic activity, and a reading above 50 indicated growth in the sector, thus this data was warmly welcomed by Dollar bulls on Friday.
On the data front today, it’s a quiet schedule. At 09:30 the UK will release Novembers Construction PMI and at 11:30 Bank of England member Ben Broadbent will be giving a speech.
