The Sterling pound today succumbed to pressure and fell from its daily highs despite the release of upbeat UK flash PMIs by Markit Economics in the early London session. The GBP/USD currency pair spiked higher briefly before falling as investors fear a rate cut by the Bank of England at their monetary policy meeting next week.
The GBP/USD currency pair today spiked to a high of 1.3171 after the PMI releases before quickly falling to a low of 1.3079 and was trading near these lows at the time of writing.
The currency pair traded with a slightly bullish bias during the Asian session and into the early London session. The pair spiked to its daily highs after the release of the flash Markit/CIPS UK Manufacturing PMI for January, which came in at 49.8 beating expectations set at 48.9. The Markit/CIPS UK services PMI released at the same time also beat consensus estimates set at 51 by coming in at 52.9. The upbeat PMI prints were not enough to maintain the pair’s bullish trajectory. Investors are worried that the BoE’s Monetary Policy Committee might cut interest rates at Thursday’s meeting.
The cable’s decline was further accelerated by the strong greenback as tracked by the US Dollar Index, which hit a high of 97.89 earlier today. The bearish tone around the pound could also be attributed to Brexit jitters, given that Brexit is just a week away.
The currency pair’s future performance is likely to be affected by geopolitical events over the upcoming weekend.
The GBP/USD currency pair was trading at 1.3087 as at 12:49 GMT having fallen from a high of 1.3171. The GBP/JPY currency pair was trading at 143.45 having dropped from a high of 144.39.
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