The pound added as much as 0.57% to $1.271, its highest since February 2 when markets were given a jolt by stronger than expected U.S. employment data that sent the dollar higher
Sterling gained against the dollar on Thursday, joining with gains by most other currencies as data from a British business activity survey came in stronger than anticipated and showed strong growth for services firms.
The pound added 0.57% to $1.271, its highest since February 2 when markets were given a jolt by stronger than expected U.S. employment data that sent the dollar higher.
The British currency was last up 0.13% as the dollar recouped some ground in the European afternoon.
Versus the euro, the pound was choppy, but last flat on the day at 85.6 pence.
The main data release for sterling on Thursday was February’s preliminary S&P Global/CIPS Composite PMI, which spans services and manufacturing companies, and which increased to 53.3, the highest in nine months.
S&P’s statement also noted that inflationary pressures remained higher, and that “the rate of input price inflation edged up to its strongest since August 2023, largely due to rising salaries in the service sector”.
Analysts said that meant the BoE could keep interest rates at their current level for longer.
We are more comfortable after today’s data with our view of an August Bank of England cut – this had been a hawkish call that the BoE would wait so long, but we wonder how long it might be before markets think we are too dovish (or even price August out altogether and delay cuts for longer), stated Nomura analysts in a note.
They expect the first rate reduction by the U.S. central bank and the ECB in June, “so the BoE’s less dovish stance should help GBP remain resilient in G10 space”, the analysts added.
