It’s hunting season baby! Did you see the pound shoot down bears yesterday? Bears on GBP/USD got fried when it skyrocketed up the charts to close the day at 1.6278 with a 153-pip win. Meanwhile, GBP/JPY ended the day a whopping 257 pips above its opening price at 138.08. Boo yeah!
The better-than-expected Services PMI report for March definitely swept the market by surprise. Following its 52.6 reading in February, the index clocked in at its 13-month high at 57.1, making the 52.5 forecast seem plain ridonculous! And the good vibes didn’t just end there, no sir! Digging further into the report I discovered that the employment component of the report showed its first increase in 9 months.
However, as awesome as the report was, I don’t think it will be enough for the BOE to announce an interest rate hike in its monetary policy statement tomorrow. Drats! It might be enough for BOE Governor Mervyn King to sound a tad more optimistic though. Hmmm, I wonder if today’s reports will also support that thesis and boost the pound.
Manufacturing data for February is on deck later at 8:30 am along with industrial production. Analysts have predicted that output of manufacturers picked up by 0.6% during the month. On the other hand, activity in the overall industrial sector is seen to have increased by 0.4%.
Then at 2:00 pm the NIESR GDP estimate for March will be released. If the calculation of hotshots at the NIESR comes in higher than the 0.2% growth we saw in February, the pound may just continue its rally!