Good day for Sterling

Wednesday ‘s trading provided a number of economic releases for the 3 majors. The day kicked off Services PMI figures for the Euro-zone and for the UK. Euro data more or less matched expectation coming in just above forecast at 52.7, an improvement in growth from 51.6 last month. The UK shortly followed and posted an even better figure of 57.2, up from 55.8 previously and again exceeding expectations. As GBP/EUR had dropped on Tuesday, this gave the perfect opportunity for these losses to be recovered with UK data out performing Euro figures. This movement occurred despite better than expected Retail Sales figures from the Euro-zone as the markets put a heavier focus on the growth results.

Throughout the day we saw the pound regain just over a cent giving a great buying opportunity amongst the negative slide that we have experienced in the last 10 days. GBP/EUR could very easily lose another few cents in the short term before finding any real support so those who missed the peak rates in January should still consider trading at the current levels if you have requirements in the coming months. GBP/USD also picked up further to a 1 month high but is not expected to continue in this fashion.

Afternoon trading saw a number of US releases with Services PMI and ISM Non-Manufacturing PMI both improving but in contrast ADP employment change posted a lower result with 40k less than in December. These announcements did little to affect USD exchange rates as the Pound and the Euro were in greater focus.

Today is the monthly interest rate decision from the Bank of England and again no change is expected, particularly in light of last month’s meeting where it was stated that interest rates are unlikely to go up until early 2016. There will almost certainly be nothing positive from this announcement leaving only one other possibility and with no other major data out all day the pound could well be back to where it started yesterday as he day develops.