Pound Recovers after PMI Disappointment

The Pound Sterling is now recovering some of Wednesday’s momentum after a kneejerk fall after the release earlier today of Markit’s PMI survey for the UK services sector. The April data did show a rise with a reading of 52.8, well above the 51.7 reading for March which was a 20-month low. Analysts, however, had been predicting a much higher read at 53.5, and the disappointment initially radiated directly out to the Pound Sterling. More importantly, however, it has now lowered expectations even further that the Bank of England might announce a rate hike at next week’s policy meeting.

As reported at 10:58 am (BST) in London, the GBP/USD was trading at $1.36, a gain of 0.19%; the pair earlier struck a session low of $1.3570, while the peak is at $1.3630. The EUR/GBP is trading at 0.88191 Pence, a gain of 0.10271%; in this trading session, the pair has ranged from a low of 0.88040 Pence to a peak of 0.88311 Pence.

Eurozone CPI Misses Forecasts

In the Eurozone, preliminary CPI numbers for April disappointed with a reading of 1.2% against expectations of a flat reading at 1.3% (year-over-year). Eurostat also reports that Core CPI, which strips out energy and food prices, fell to 0.7% against a forecast of 0.9% (year-over-year), falling from 1.0% in the previous period. The news did little to dampen trader sentiment, however, and the EUR/USD is trading at $1.1997, a gain of 0.35%, still off the session peak of $1.20100.

Barbara Zigah is a freelance journalist living in Ghana, who specializes in Forex-related content; her online work has appeared in the IB Times, NASDAQ, Benzinga, and Seeking Alpha.