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POUND STERLING TALKING POINTS
- UK PMI bolsters pound.
- 50bps interest rate hike gains traction.
FUNDAMENTAL BACKDROP
UK PMI’s revealed both sectors (composite) exceeding estimates despite manufacturing coming slightly below forecasts – see economic calendar below. This print comes on the back of significant misses in the eurozone earlier this morning by way of France and Germany.
GBP ECONOMIC CALENDAR
Source: DailyFX Economic Calendar
Yesterday’s UK inflation print coupled with todays UK PMI numbers may open up the possibility for the Bank of England (BoE) to move towards a 50bps rate hike in the next meeting. The economy may not be teetering just yet and could help in the inflation fight.
TECHNICAL ANALYSIS
Initial market reaction shows GBP bulls coming to the fore as hawkish bets increase on both GBP/USD and EUR/GBP charts respectively.
GBP/USD 5-MINUTE CHART
Chart prepared by Warren Venketas, IG
EUR/GBP 5-MINUTE CHART
Chart prepared by Warren Venketas, IG
Contact and follow Warren on Twitter: @WVenketas
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