GBP/USD hits 12-week high on UK market optimism and easing inflation
2023.11.24 15:59
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Optimism has surged in the UK financial markets, leading the exchange rate to reach a twelve-week peak, buoyed by improved consumer confidence and a promising business outlook despite persistent recessionary pressures. On Thursday, the pound sterling climbed to 1.2615 against the US dollar, reflecting positive reactions to the latest S&P Global/CIPS data and a sell-off in Gilts that pushed bond yields higher.
By today, the GBP/USD pair held its strength, trading at 1.2606 amidst mixed economic signals from the US, including robust Services and Composite PMIs but a contracting Manufacturing PMI. In the UK, inflation showed signs of cooling down but remained significantly above the Bank of England’s (BoE) target rate, registering at 4.6%.
The market has also digested the Chancellor’s Autumn Statement, which presented a sobering view on growth and inflation, with a measure of cautious optimism. Adding to the narrative, BoE Chief Economist Huw Pill reaffirmed the central bank’s dedication to tackling inflation amid the challenging economic landscape.
Looking ahead, traders are gearing up for further guidance from BoE Governor Andrew Bailey next week and key US economic reports such as Consumer Confidence and ISM Manufacturing PMI that could influence future movements of the GBP/USD.
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