Sterling buyers returned ahead of tomorrow’s Bank of England policy meeting and statement. The Pound rallied and this morning tested the 1.1700 resistance level v Euro. Supported by a rise in UK industrial orders (strongest since 2019) and with business confidence among UK employers hitting a five-year high (up 21 points in a month), these are both good indicators for a strong recovery in the second half of 2021. Against the US Dollar, having closed on Tuesday above the pivotal $1.3900 level, the Pound has also held onto gains, with the Dollar trading on the weaker side across the board. This followed comments from Federal Reserve officials on inflation expectations (again). June UK Manufacturing purchasing managers index (PMI) came in just above consensus (64.2 v 64), whereas services PMI undershot (61.7 v 62.8).
USD As two more Federal Reserve officials toned down the ‘hawkish’ rhetoric, stocks and indices recovered with the US Dollar attracting selling interest across a broad range of currencies. US June manufacturing PMI’s are due for release at 2.45pm.
EUR June Eurozone PMI’s for manufacturing and services both beat expectations, as the Euro holds onto its gains against the Dollar too.