Pound Falls on BoE Rate Cut Fears, Despite Positive UK Flash PMIs

The  Sterling pound today succumbed to  pressure and  fell from its daily highs despite the  release of  upbeat UK flash PMIs by  Markit Economics in the early London session. The GBP/USD currency pair spiked higher briefly before falling as investors fear a rate cut by the Bank of  England at  their monetary policy meeting next week.
The  GBP/USD currency pair today spiked to  a  high of  1.3171 after the  PMI releases before quickly falling to  a  low of  1.3079 and  was trading near these lows at  the  time of  writing.
The  currency pair traded with a  slightly bullish bias during the  Asian session and  into the  early London session. The  pair spiked to  its daily highs after the  release of  the  flash Markit/CIPS UK Manufacturing PMI for  January, which came in  at  49.8 beating expectations set at  48.9. The  Markit/CIPS UK services PMI released at  the  same time also beat consensus estimates set at  51 by  coming in  at  52.9. The  upbeat PMI prints were not enough to  maintain the  pair’s bullish trajectory. Investors are worried that the  BoE’s Monetary Policy Committee might cut interest rates at Thursday’s meeting.
The  cable’s decline was further accelerated by  the  strong greenback as  tracked by  the  US Dollar Index, which hit a high of 97.89 earlier today. The bearish tone around the pound could also be attributed to Brexit jitters, given that Brexit is just a  week away.
The  currency pair’s future performance is likely to  be affected by  geopolitical events over the  upcoming weekend.
The  GBP/USD currency pair was trading at  1.3087 as  at  12:49 GMT having fallen from a  high of  1.3171. The  GBP/JPY currency pair was trading at  143.45 having dropped from a  high of  144.39.

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