Pound And US Dollar May Not Be Affected By The Economic Data
by Latisha Liming
In the European trading hours, one of the most valuable data is the UK PMI report.
The cross-sector activity slowed down in April and this is expected to be reflected in the composite index. The manufacturing and construction performance was monitored by the Purchasing Manager surveys and the report outperformed the expectations. If the PMI data goes down, the most likely reason would be the services.
Despite the expected low PMI data, the British Pound may not be affected. The Bank of England (BOE) has commented that it will continue to hold its policy throughout the next year. This means that traders may not be interested in policy bets. The soft data, on the other hand, may tone down the Brexit outlook of the UK. When the demand for hard Brexit softens before the election in June, the Pound may be supported in the forex market. The GBP priced assets will remain stronger as of now even with a poor PMI data. If there is a surprise upbeat performance of PMI data, it would also be supportive for the Pound.
The US economic data may come into spotlight later in the day. The economic statistics will also have a lesser impact on the US dollar because the Fed has already commented that the sluggish first quarter growth is just transitory. The fed rate hike program is on track and this supports US dollar in the market. The investors are now interested in the job reports due on Friday.
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