TheÂ British pound today rallied higher after theÂ release ofÂ theÂ UK Services PMI forÂ May byÂ IHS Markit, which beat expectations byÂ aÂ significant margin. TheÂ positive PMI data served toÂ raise expectations ofÂ aÂ rate hike byÂ theÂ Bank ofÂ England inÂ theÂ near future asÂ theÂ country’s GDP growth rebounds inÂ theÂ current quarter.
TheÂ GBP/USD currency pair today rallied from aÂ low ofÂ 1.3301 toÂ aÂ high ofÂ 1.3393 gaining over 90 points after theÂ PMI release.
TheÂ currency pair rallied higher after theÂ release ofÂ theÂ Markit/CIPS UK Services PMI, which came inÂ atÂ 54.0 exceeding theÂ consensus estimate ofÂ 53.0. TheÂ Services PMI was theÂ latest PMI print toÂ beat expectations after theÂ construction andÂ manufacturing PMIs also surpassed expectations. TheÂ three upbeat PMIs indicate that theÂ UK economy is onÂ track toÂ post 0.3%-0.4% GDP growth inÂ theÂ second quarter given theÂ weak growth recorded inÂ theÂ first quarter. TheÂ upbeat PMI reading also raised investors’ expectations ofÂ aÂ rate hike byÂ theÂ BoE atÂ their August meeting.
TheÂ British pound was weighed down byÂ Brexit jitters asÂ theÂ issue ofÂ the Irish border is yet toÂ be resolved. It is not yet clear whether theÂ UK shall have aÂ hard land border with theÂ EU atÂ theÂ Irish border post-Brexit.
TheÂ currency pair’s future performance is likely toÂ be affected byÂ theÂ release ofÂ theÂ US ISM Non-Manufacturing/Services PMI later today.
TheÂ GBP/USD currency pair was trading atÂ 1.3355 asÂ atÂ 11:27 GMT having rallied from aÂ low ofÂ 1.3301. TheÂ GBP/JPY currency pair was trading atÂ 146.60 having risen from aÂ low ofÂ 146.03.
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