The Pound was able to claw back some of its recent losses on Wednesday, marking gains against both the Dollar and Euro by the close. Despite Sterling making subtle improvements in the session, upside was capped due to “uncertainty whether the Bank of England will raise interest rates” at today’s monthly meeting. GBPUSD was able to find considerable support last month from the expectation that the UK central bank would hike rates, however, this week “growing doubts surrounding the outcome of the meeting… has been giving investors jitters” and thus hindered Sterling’s performance. The last set of MPC meeting minutes showed that “officials were divided over whether pre-conditions for policy tightening had been achieved”. Governor Andrew Bailey said only 2 weeks ago that the BoE “will have to act” to battle rising inflation, a view he shared with 2 of the other 9 MPC members.
GBPUSD opened on Wednesday at 1.3619 and closed above that mark at 1.3662
GBPEUR edged closer back to 1.18 at the end of yesterdays close, finishing the day at 1.1795. The pair opened the session at 1.1755.
Aiding Sterling’s momentum yesterday morning was better than expected PMI numbers for October. Markit / CIPS Composite gave a final reading of 57.8, marking a 0.9 improvement on the forecast. Services PMI was forecasted at 58 but printed a figure of 59.1. A reading above 50 indicated that the services sector is generally expanding.
EURUSD traded in a tight range on Wednesday and ended the session close to where it started. The pair opened the morning at 1.1586 and finished at 1.1582.
On the data front, at 08:55 the final Services and Composite PMI numbers from Germany were published. Composite gave a reading of 52, and Services printed 52.4. Eurozone Composite PMI came in 30 minutes later, giving a final figure of 54.2. In the afternoon, the weekly US Jobs report will be published at 12:30.