Following both UK and US April PMI figures, sterling has seen recovery in the market.
Yesterday morning, UK PMI’s were released showing both the service and composite indexes are performing strong, with service figures landing far above expectations. This positive data acts as a big indicator to show the UK economy is making headway to emerge from the technical recession it found itself earlier in the year. This boost of optimism around the economy has increased traders risk appetite for the Pound and, as a result, Sterling has made some recovery from its recent losses.
US PMI’s that were released later that afternoon showed the opposite, with composite, manufacturing, and services figures all taking a beating across the board and falling way below consensus. This saw the Greenback slip back and reverse on some of its recent gains, which in turn also led to further flows into the Pound.
As a result, the GBP/USD has now bounced back into the mid 1.24’s. Traders will be keen to keep an eye on US economic data due this week, including US durable Goods orders, Q1 GDP, and US Core personal expenditure figures on Wednesday, Thursday & Friday respectively. These will hopefully provide further indication on the overall outlook on the US economy, which may consequently steer appetite on the Dollar.
