Sterling Remains Elevated on Stronger UK Manufacturing PMI | IFCM India
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Sterling Remains Elevated on Stronger UK Manufacturing PMI - 2.12.2013

The British pound started the week on higher ground against the greenback continuing its uptrend from the previous week supported by BOE decision to reduce stimulus on housing sector due to fears of a bubble in the respective market. The GBPUSD found its way to a fresh 27-month high at 1.6436 and was retracing lower early on Monday, however the sterling is strengthening now due to Manufacturing PMI surprisingly rising to 58.4 for November from 56.5 the previous month, released as of writing. Our expectation is that upside is likely to remain strong during the intraday.


The Japanese Yen weakened further amid improving Chinese manufacturing PMI on Sunday and stronger than projected HSBC Manufacturing PMI on Monday. The USDJPY jumped to a new 6-month high at 102.73 maintaining its positive structure and approaching key resistance at 103.62.


USDJPY
USDJPY


Due to rising manufacturing indicators of China, commodity currencies’ demand increased, lifting the Australian dollar from 0.9054 to cap at 0.9169 versus the US dollar. In addition the New Zealand bounced up from 0.8084 to as high as 0.8224 early on Monday.


Elsewhere, the common currency was underpinned after the release of higher flash inflation estimates limiting speculation of more accommodative monetary policy by ECB coupled with falling unemployment rate to 12.1% in October for Eurozone from 12.2% the previous month. The Euro versus the US dollar remained near its top at 1.3619 on Monday morning while as of typing declined due to cross buying between stronger British pound. The EURGBP have been on a downward configuration in the recent trading falling to a more than 10-month low at 0.8251 after breaching key support at 0.8300.


EURGBP
EURGBP


Looking ahead for Monday, apart from European PMIs already released, focus is shifting to Fed Chairman, Bernanke, speech and US ISM Manufacturing PMI. Investors’ trading this week would be greatly impacted by Central Banks monetary announcements as well as US Non-Farm payrolls on Friday.
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