HiFX comments on the PMI data
Andy Scott, associate director of FX advisory services at foreign currency specialists, HiFX, comments on the PMI data.
“Sterling rose across the board following this morning’s services PMI which added to signs that the economic activity is back on the rise after a slowdown in the final three months of 2014. After an upwards revision to fourth quarter GDP last week, it looks like first quarter GDP growth will be slightly stronger, with several indicators rising, including consumer confidence which hit a 12-year high last month. With one month to go until the general election, the economy looks in good shape with unemployment falling and optimism rising, signalling that perhaps the uncertainty of the outcome won’t be as destabilising as some fear.
“Sterling hit a session high of 1.3715 against the euro and rose close to its session high against the dollar, above 1.4900 before edging back lower against both. With the election looming, traders are likely to be cautious in regards to being too exposed to sterling given the potential for increased volatility in the lead up to and just after the election. As the closely fought referendum in Scotland and the last general election’s hung parliament have shown, political uncertainty can have quite a negative impact on the currency’s value, even if only in the short-term.”
