Demand at 1.9570 based cable after the pound came under early European selling pressure for the second day in succession. German and Asian name buying aided the subsequent recovery which has reached highs just shy of 1.9645 since the 11:00GMT disclosure that the CBI's quarterly expected selling price index soared to +19 in February, from minus 3 in November.
That index jump is further good news for UK rate hawks touting another 25bp hike to 5.5% as early as next week (March 8). Those hawks were already squawking following the 09:30GMT unveiling of February's much better-than-expected UK manufacturing sector PMI. This leapt to a 31-month high of 55.4, from an upwardly revised 53.2 in January. The forecast number was 53.0.
GBP/USD offers are touted at 1.9650 three pips ahead of today's Asian session top. More offers are noted at 1.9675 a pip above Tuesday's 12-day top. A raft of US data is due today, including January's core PCE deflator at 13:30GMT. Forecast +0.2% m/m, +2.3% y/y. February's ISM manufacturing index will be revealed at 15:00GMT. Forecast: 50.0.
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