Yesterday saw a more resilient US dollar mixed with a pound under pressure from highly concerning economic data.
Tuesday trade saw a more robust greenback which gained against the majority of its peers. The general tone across financial markets was one of positivity. Following the Federal Reserve’s recent U-turn, from a central bank confident in their economy and looking to continue raising rates to one with concern and desire to remain patient, it now appears participants are a lot calmer. From yesterday’s perspective this translated into a round of US dollar buying.
The pound was firmly under the cosh yesterday following a concerning Services PMI number. The report showed that employment fell for the first time since 2012 while new orders fell for the first time since 2016. The release guided sterling lower with $1.30 and €1.14 against the US dollar and euro easily broken to the downside. The momentum continued across the trading session with prices gunning to break $1.29 and €1.13 by late afternoon. Rates have since somewhat stabilised but the pressure is very much still there.
Written by Viv Savani. 8:28am, February 6th 2019
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