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Weekly Roundup: Pound bounces back from PMI driven losses

currency-newsWeekly Roundup: Pound bounces back from PMI driven losses
The pound suffered a sharp selloff in the first half of the week following the release of the UK’s latest PMI figures.

May’s preliminary figures revealed a sharp plunge in Service sector growth, which stoked recession fears and saw GBP/EUR and GBP/USD shed over half a cent on Tuesday.

However, Sterling then began to claw back some of these losses through the second half of the week.

This was aided by the publication the Sue Gray report into Downing Street lockdown breaches, which proved to be less damning for Boris Johnson than some GBP investors had feared. This helped to ease questions over the future of Johnson’s premiership and translated into modest gains for the pound.

Sterling then managed to hold on to these gains after the size of Chancellor Rishi Sunak’s cost of living support package exceeded expectations.

This helped the pound end the week on a positive note amidst hopes the £15bn fiscal package will help the UK narrowly avoid a recession as well as pave the way for the Bank of England (BoE) to continue raising interest rates.

There is an absence of notable UK data this week. Alongside the closure of UK markets for much of the week due to the extended Jubilee weekend could result in some thin trading conditions in the pound, potentially leaving it vulnerable to losses.
Philip McHugh

Philip McHugh

Joining the corporate trading desk in 2007, Phil now over sees all of Currencies Direct’s corporate dealing activity. Having gained experience working with hundreds of businesses to optimise international payments processes and execute comprehensive risk management strategies, Phil currently works with a portfolio of corporate clients whilst managing Currencies Direct’s overall market exposure

Phil has FCA approval and has completed the Certificate in International Treasury Management (CertiTM)

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