Forex News – Sterling jumps after UK Services PMI surprises higher
July 3, 2013 10:47 am
Sterling jumped against the dollar and the euro after U.K. data beat forecasts and expanded at the fastest rate since March 2011 last month, easing concerns over the country’s economic outlook.
The Purchasing Managers Index (PMI) for the services sector surprisingly rose higher-than-expected and higher than the previous month.
The June PMI compiled by Markit CIPS showed a 56.9, defying forecasts for it to fall to 54.5 from May’s 54.9. A number above 50.0 indicates expansion in the industry, while below 50.0 indicates contraction.
The service sector comprises a large part of the British economy, so today’s data was a relief for markets, one day ahead of the Bank of England policy meeting tomorrow.
“The buoyant picture for June means the economy is on course to expand by at least 0.5 percent in the second quarter, with more growth to come, ” said Chris Williamson, Chief Economist at Markit survey.
“With growth this strong it’s hard to see how any of the members of the Monetary Policy Committee could make a case for further quantitative easing, ” Williamson added.
Immediately after the release of the data, GBPUSD surged from $1.5162 to $ 1.5202, and extended higher to $1.5257 by 11am London time. EURGBP fell to 84.88 pence from a session high of 85.73 pence.
Sterling jumped against the dollar and the euro after U.K. data beat forecasts and expanded at the fastest rate since March 2011 last month, easing concerns over the country’s economic outlook.
The Purchasing Managers Index (PMI) for the services sector surprisingly rose higher-than-expected and higher than the previous month.
The June PMI compiled by Markit CIPS showed a 56.9, defying forecasts for it to fall to 54.5 from May’s 54.9. A number above 50.0 indicates expansion in the industry, while below 50.0 indicates contraction.
The service sector comprises a large part of the British economy, so today’s data was a relief for markets, one day ahead of the Bank of England policy meeting tomorrow.
“The buoyant picture for June means the economy is on course to expand by at least 0.5 percent in the second quarter, with more growth to come, ” said Chris Williamson, Chief Economist at Markit survey.
“With growth this strong it’s hard to see how any of the members of the Monetary Policy Committee could make a case for further quantitative easing, ” Williamson added.
Immediately after the release of the data, GBPUSD surged from $1.5162 to $ 1.5202, and extended higher to $1.5257 by 11am London time. EURGBP fell to 84.88 pence from a session high of 85.73 pence.
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