UK PMI Heightens Hawkish Bets, GBP Strengthens Against USD and EUR

POUND STERLING TALKING POINTS

  • UK PMI bolsters pound.
  • 50bps interest rate hike gains traction.

FUNDAMENTAL BACKDROP

UK PMI‘s revealed both sectors (composite) exceeding estimates despite manufacturing coming slightly below forecasts – see economic calendar below. This print comes on the back of significant misses in the eurozone earlier this morning by way of France and Germany.

GBP ECONOMIC CALENDAR

Source: DailyFX Economic Calendar

Yesterday’s UK inflation print coupled with todays UK PMI numbers may open up the possibility for the Bank of England (BoE) to move towards a 50bps rate hike in the next meeting. The economy may not be teetering just yet and could help in the inflation fight.

TECHNICAL ANALYSIS

Initial market reaction shows GBP bulls coming to the fore as hawkish bets increase on both GBP/USD and EUR/GBP charts respectively.

GBP/USD 5-MINUTE CHART

gbpusd 5 minute chart

Chart prepared by Warren Venketas, IG

EUR/GBP 5-MINUTE CHART

eurgbp 5 minute chart

Chart prepared by Warren Venketas, IG

Contact and follow Warren on Twitter: @WVenketas

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