The pound continued to fall yesterday with the GBPUSD pair edging into the $1.36 handle in the morning European session. Economic data was mixed with inflation data much softer than forecast but flash PMI numbers painting a rosy picture for the UK economy.
Price pressures remain subdued in the UK following yesterday’s data. The consumer price index printed at 0.1% in February versus expectations of 0.5%. This removes the idea that the Bank of England would be compelled to raise rates to stem off any price rises which may occur due to the introduction of ultra-low rates and quantitative easing last year in response to the pandemic.
Manufacturing and services March flash PMI numbers both smashed expectation, offering the notion that the UK lockdown has been a lot more manageable for the business sector than this time last year. These data points did not provide any real support for the pound which remained pressured throughout Wednesday’s session.
8:15am, March 25th 2021
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