Like the Euro, the British pound held up very well against the US dollar today. In fact, the currency is up across the board thanks to the highest manufacturing PMI reading in 8 months.
Both input and output prices increased, which is reflective of the higher prices charged by businesses. Although the UK economic calendar was relatively light this past week, it picks up in the week ahead. We are expecting construction sector PMI, retail sales, service sector PMI, more house price reports, industrial production and another Bank of England rate decision. Unlike the ECB, where the rate decision is expected to be a big market mover regardless of which way the central bank sways, the BoE rate decision will most likely be a nonevent. Having just raised rates last month, even though the central bank could still raise rates again in the months to come, mixed data will prevent them from lifting rates in June. When the BoE leaves rates unchanged, they do not issue any comments or statement, which is why there could be little reaction to the rate announcement.