Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Service Sector Miss Does Little To Help Pound

Published 03/08/2018, 09:36
Updated 18/08/2020, 10:10

The most recent data from the UK service sector has done little to boost the near-term prospects for the pound, with the currency falling down below the 1.30 handle to retest last month’s 10-month low against the US dollar in the initial reaction.

A print of 53.5 was below the expected 54.7 and comes just a couple days after the manufacturing equivalent also missed forecasts. The print is by no means disastrous but it does serve to reaffirm the notion that the economy is far from firing on all cylinders and there will need to be a significant pick-up in these data points to justify further rate increases going forward.

US employment data in focus

The pound failed to rally on Thursday, despite the Bank of England delivering not only an increase in rates but also fairly hawkish policy message and now the shorts appear to have control of the tape and are looking to push the market lower. For the GBP/USD cross this afternoon’s US jobs report could also be potentially market-moving with a strong print likely to further aid the recent appreciation in the buck, with the US dollar rising close to a 1-year high this morning on a trade-weighted basis.

Carney sees uncomfortably high risk of no-deal Brexit

BoE Governor Mark Carney is facing more criticism this morning after declaring that the risk of a no-deal Brexit is “uncomfortably high.” The governor described the UK crashing out of the EU without a deal as “highly undesirable” and both parties “should do all things they can to avoid it. “ While this is quite clearly an accurate assessment of the current political backdrop it has not stopped critics hitting out not long after several bemoaned the bank’s decision to hike rates yesterday. Carney will likely be feeling that he is damned-if-he-does and damned-if he-doesn’t after he was also criticised for keeping rates on hold back in May.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.