Further gains for the Pound are likely to be limited.
The Pound Sterling struck a fresh 8-month peak versus its rival across the, largely a factor of a much weaker US Dollar. The new policy framework from the US Federal Reserve Bank suggests that the current low-interest rate environment is likely to endure far longer than analysts had anticipated. Further gains for the Pound are likely to be limited, however, as traders await a speech from the head of the Bank of England; Governor Bailey is scheduled to speak on Thursday. Most analysts agree that the BoE is likely to further expand its bond purchasing program in a continued effort to bolster the UK economy.
In London trading as of 11:00 am, the GBP/USD was trading higher at $1.344, a gain of 0.576% and moving away from the session peak of $1.34486. The EUR/GBP was lower at 0.8908 Pence, down 0.2252%; the pair has ranged from a trough of 0.89051 Pence to a high of 0.89470 Pence. The GBP/JPY was higher at 142.197 Yen, up 0.4599%.
Eurozone Manufacturing Surveys Mixed
Markit PMI surveys for the UK and the EU were released earlier today and were largely mixed. The Manufacturing sector surveys for August for the UK, Germany, and Spain all had readings that were lower than analysts had predicted; in the case of Spain, the reading was at 49.9, falling below the threshold which separates an expanding sector from one that is contracting. The EU PMI reading for the sector was flat at 51.7, as expected. France and Italy both had PMI readings that were better than analysts' forecasts, at 49.8 and 53.1. The EUR/USD was trading at $1.1972, up 0.2848%, after the data releases.