6 Nov 2013
Flash: GBP/USD strengthens on BoE rate rise prospects - Investec
Jonathan Pryor, Corporate Treasury Analyst at Investec reminds us that previously, he commented that that yesterday’s big UK data release, the Services PMI, had the potential to move markets and it certainly lived up to this billing.
Key Quotes
“The index posted its highest reading in over 16 years, showing gains in every sector of the survey, with the new orders series reaching an all-time high. This drove the pound to race higher against its G7 peers.”
“GBP/USD gained over a cent yesterday and remains comfortably in the mid 1.60s, whilst GBP/EUR saw a similar move higher, breaking through the one month high of 1.1875, and it remains close to 1.19 this morning.”
“The strong PMI reading suggests growth may pick up further in the last quarter and thus increases the likelihood that the BoE will raise real GDP forecast from 1.3% in 2013 after having assumed in August that growth would ease back modestly in Q4.”
“Expectations for further strengthening in 2014 have also increased. In addition to the booming Services sector, employment growth is picking up, putting upward pressure on wages and costs and therefore inflation which has the potential to be a key driver for GBP strength going forwards.”
Key Quotes
“The index posted its highest reading in over 16 years, showing gains in every sector of the survey, with the new orders series reaching an all-time high. This drove the pound to race higher against its G7 peers.”
“GBP/USD gained over a cent yesterday and remains comfortably in the mid 1.60s, whilst GBP/EUR saw a similar move higher, breaking through the one month high of 1.1875, and it remains close to 1.19 this morning.”
“The strong PMI reading suggests growth may pick up further in the last quarter and thus increases the likelihood that the BoE will raise real GDP forecast from 1.3% in 2013 after having assumed in August that growth would ease back modestly in Q4.”
“Expectations for further strengthening in 2014 have also increased. In addition to the booming Services sector, employment growth is picking up, putting upward pressure on wages and costs and therefore inflation which has the potential to be a key driver for GBP strength going forwards.”