Data was better, but still not great. For the first time since the pandemic, the U.K. unemployment rate declined, but with 147,000 job losses at the end of the year, joblessness is still near a five-year high. U.K. inflation and PMI numbers are due for release tomorrow. Faster consumer and producer price growth is expected as commodity prices increased sharply last month and the February PMIs showed rapid manufacturing and service sector price rises. Smooth vaccine rollout should also promote stronger manufacturing and service sector PMIs. All of this is positive for sterling, but will it be enough to renew the currency’s rise?
First off, if any of these reports surprise to the downside, we could see big losses in GBP because investors expect good numbers. Weaker service or manufacturing PMIs could take GBP/USD to 1.36 easily. If the data is in line or better, how sterling trades will be dependent on the market’s broader appetite for risk and U.S. dollars.
Need Your Help Today. Your $1 can change life.