UK February flash manufacturing and services PMIs both surprised to the upside yesterday, indicating some fightback from the already bruised and battered UK economy. While the services component was well into expansionary territory, the manufacturing print was narrowly in the contractionary zone (below 50), albeit much healthier than forecast. The data immediately brought sterling buyers into the mix. The pound shot up to $1.21 after trading into the $1.19 handle before the release. GBPEUR surged higher too, making good ground toward the €1.14 mark. These gains have been held onto as we commence Wednesday’s European trading session.
Today’s highlight comes from across the pond with the latest set of insights into the Fed’s thought process on monetary policy. Emphasis will be placed on the prospect of further hikes given the very strong NFP report just before their most recent announcement. The minutes will be released at 7 pm tonight and could produce so volatility across the US dollar major crosses.
Written by Viv Savani. 8:11am, February 22nd 2023
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