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UK services PMI surprisingly returns to growth

Dramatic 1% swings seen in GBP's value over the last 24-hours..



The Pound is playing its 'emerging currency' role well this month, as it has been heavily involved in the heightened market volatility. Sterling has seen wild swings in its value of late and is behaving hypersensitive to economic and fiscal releases. Here is what the mid-market charts show versus firstly the $ & then €;

November 1st - 1.21
November 3rd - 1.2380
November 10th - 1.2190
November 14th - 1.25
November 17th - 1.2380
November 22nd - 1.2550

November 6th - 1.1550
November 11th - 1.14
November 14th - 1.15
November 20th - 1.14
November 22nd - 1.15

Not an easy month to navigate SPOT trades or forecast forward contracts from!

Yesterday, the Pound actually lost ground across the board once Chancellor Hunt started to deliver the Autumn Statement. A downgrade in the UK's economic forecast for next year, leaves the UK floundering compared to its major peers (0.4%) and leaves little room for a negative surprise.

On Tuesday, there was a bump for Sterling after BoE Governor Bailey pushed back on rising expectations for an interest rate cut by mid 2024. Now with the confirmed fiscal changes from the Government and with better than expected economic figures this month, money markets have firmly priced in a rate cut for the end of 2024, further strengthening the £. 

Today, the Pound was back into the green after UK PMI data for November beat consensus. The all-important services sector returned to growth and business activity showed growth for the first time in 3-months. The EU PMI release was as expected and this is why we have seen Sterling gain today.