Home Daily Commentaries UK services data boosts the Pound

UK services data boosts the Pound

Alex Hartley
Written by
Alex Hartley

Alex Hartley

OFXpert

Driven by a passion for currency markets and data movement, Alex finds great appeal in the dynamic nature of the industry.

| Thursday 25 January, 2024

Daily Currency Update

January data released yesterday revealed that both manufacturing and services PMI beat expectations. The rise in service sector activity was the fastest since May 2023, whereas manufacturing production decreased to the greatest extent for three months.

The news sent GBP/USD back up to 1.2770 and GBP/EUR to 1.1710 shortly after the release at 9:30am Wednesday, but these jumps didn’t hold through yesterday’s session. This is most likely due to the anticipation of heavy weight data from Europe and the US today.

The European Central Bank (ECB) will be announcing its latest interest rate decision, but with no change expected, it will be the post-meeting conference that market participants will be anticipating, trying to decipher future interest rate decisions.

The US will be releasing its latest GDP numbers this afternoon which is expected to show some cooling in growth. Market participants will monitor this alongside the ECB for any cues on when the US Federal Reserve will begin trimming its rates.

Key Movers

Frankfurt will likely be the centre of attention during European hours today, as ECB policy makers gather to decide monetary policy for the Eurozone. While it is largely expected that the central bank will maintain interest rates at 4.5%, there is uncertainty over when officials will decide inflation is no longer an issue in order to start cutting the record high rates.

This brings President Christine Lagarde’s post-meeting news conference into particular focus among market participants. The December CPI release from the Eurozone showed a climb from 2.4% to 2.9% and pushed back markets expectation of an April cut. If any guidance is given in the following press conference on the interest rate decision, this will likely impact the Euro. GBP/EUR sits within its recent range after touching 1.1710 yesterday. EUR/USD sits just under 1.0900.

Expected Ranges

  • GBP/USD: 1.2680 - 1.2810 ▲
  • GBP/EUR: 1.1650 - 1.1740 ▲
  • GBP/AUD: 1.9270 - 1.9440 ▲
  • EUR/USD: 1.0820 - 1.0950 ▲

Written by

Alex Hartley

OFXpert

Driven by a passion for currency markets and data movement, Alex finds great appeal in the dynamic nature of the industry. With over 20 years of experience, Alex works closely with businesses to understand their foreign exchange requirements and align them with solutions. Placing a strong emphasis on customer service, he takes pride in nurturing long-lasting relationships with clients.