European Session – Sterling back above 1.60 on strong services PMI data
November 5, 2013 1:26 pm
There was more movement in currency markets today after a relatively quiet start to the week. Economic data released during the European session from the UK and from the Eurozone caused some volatility for the pound and for the euro.
Sterling was noticeably higher following stronger – than – expected Services PMI which beat forecasts to rise to 62.5 in October. This was the best level since 1997 and much higher than the 59.80 expected (as per a poll by Reuters). The September PMI reading was 60.30. Today’s data come a day after construction PMI also rose more than expected.
Immediately after the data, GBPUSD jumped over 80 pips to a session high of 1.6060. Cable ended the session with a 0.6% gain at 1.6060. Focus now turns to the Bank of England decision on Thursday.
The euro suffered losses against the stronger pound after the data, with EURGBP dropping 0.6% to end at 0.8400.
In other economic news today, the European Commission lowered its growth forecasts for the Eurozone next year from 1.2% to 1.1%. Meanwhile for this year, the Commission expects growth to have contracted by 0.4%, less than the 0.7% contraction in 2012.
The euro initially dipped against the US dollar on the news to a session low of 1.3477 but quickly recovered to 1.3495 before ending the session slightly down by 0.02%. There was little effect on the euro after Eurozone Producer Prices rose 0.1%, after being flat in August.
The US dollar is trading lower against the yen today, extending its decline in the European session to end 0.1% lower at 98.30. Since Friday’s rally to a 2-week high of 98.83, USDJPY is down half a percentage point to 98.27. The dollar’s rally faded yesterday after softer factory numbers.
Meanwhile uncertainty of when the Fed will begin tapering stimulus is also keeping the dollar subdued. The real driver for the greenback will be nonfarm payrolls on Friday. However, US non-manufacturing ISM data due in the upcoming US session could also pose an immediate risk to the dollar.
There was more movement in currency markets today after a relatively quiet start to the week. Economic data released during the European session from the UK and from the Eurozone caused some volatility for the pound and for the euro.
Sterling was noticeably higher following stronger – than – expected Services PMI which beat forecasts to rise to 62.5 in October. This was the best level since 1997 and much higher than the 59.80 expected (as per a poll by Reuters). The September PMI reading was 60.30. Today’s data come a day after construction PMI also rose more than expected.
Immediately after the data, GBPUSD jumped over 80 pips to a session high of 1.6060. Cable ended the session with a 0.6% gain at 1.6060. Focus now turns to the Bank of England decision on Thursday.
The euro suffered losses against the stronger pound after the data, with EURGBP dropping 0.6% to end at 0.8400.
In other economic news today, the European Commission lowered its growth forecasts for the Eurozone next year from 1.2% to 1.1%. Meanwhile for this year, the Commission expects growth to have contracted by 0.4%, less than the 0.7% contraction in 2012.
The euro initially dipped against the US dollar on the news to a session low of 1.3477 but quickly recovered to 1.3495 before ending the session slightly down by 0.02%. There was little effect on the euro after Eurozone Producer Prices rose 0.1%, after being flat in August.
The US dollar is trading lower against the yen today, extending its decline in the European session to end 0.1% lower at 98.30. Since Friday’s rally to a 2-week high of 98.83, USDJPY is down half a percentage point to 98.27. The dollar’s rally faded yesterday after softer factory numbers.
Meanwhile uncertainty of when the Fed will begin tapering stimulus is also keeping the dollar subdued. The real driver for the greenback will be nonfarm payrolls on Friday. However, US non-manufacturing ISM data due in the upcoming US session could also pose an immediate risk to the dollar.
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