The pound got a further boost yesterday following the release of better than expected Services PMI data, which came in at 55.1 vs. forecasts for a reading of 54.0, an 8-month high. It indicates that the economy likely grew by 0.4% in the second quarter, up from 0.2% in the opening quarter of 2018 and so it has increased market expectations for an August rate hike.
Cable continued to climb higher throughout the day yesterday, benefiting from improving risk sentiment. Traders will now be looking to Theresa May’s outline for a new Brexit plan later on in the week. In fact, Downing Street has already set out some of the details on how customs could be handled - it could allow the UK the freedom to set its own tariffs as well as using tech to determine whether UK or EU tariffs should be applied to any good.
Mark Carney is due to speak later this morning, although it’s uncertain whether he’ll reference monetary policy. Market moving, or moreover GBP/USD moving data is due out this afternoon from across the pond by way of US ADP Non-Farm Employment, ISM Non-Manufacturing PMI and FOMC Meeting Minutes.