7 Jun 2013
Flash: UK short term survey’s firmer - ANZ
FXstreet.com (London) - Brian Martin who is a Senior Strategist and Amber Rabinov, a Senior Economist at ANZ explained in their opinion the strength in the pound is due to the short term survey data that has been that bit firmer.
The May PMIs for manufacturing (51.3 vs 49.8), construction (50.8 vs 49.4) and services (54.9 vs 52.9) all came in stronger than expected, as they did across Europe. They said the difference is that the UK PMIs are above 50, implying expansion. The UK housing market is also improving. In April, the Halifax reported house price series rose by 0.4% m/m to their highest level since August 2010.
In an environment where against some major currencies, the dollar is weakening, this slight shift in tone and better survey data has provided sterling with support, although it remains broadly stable versus the euro. It would suggest to them that in this environment of global financial uncertainty, where the pound can do well given some safe-haven status, that cable's upside may stretch further. They said if GBP/USD can establish itself above 1.56, it could target 1.60 in the short term even if the longer term backdrop to the pound remains worrying.
The May PMIs for manufacturing (51.3 vs 49.8), construction (50.8 vs 49.4) and services (54.9 vs 52.9) all came in stronger than expected, as they did across Europe. They said the difference is that the UK PMIs are above 50, implying expansion. The UK housing market is also improving. In April, the Halifax reported house price series rose by 0.4% m/m to their highest level since August 2010.
In an environment where against some major currencies, the dollar is weakening, this slight shift in tone and better survey data has provided sterling with support, although it remains broadly stable versus the euro. It would suggest to them that in this environment of global financial uncertainty, where the pound can do well given some safe-haven status, that cable's upside may stretch further. They said if GBP/USD can establish itself above 1.56, it could target 1.60 in the short term even if the longer term backdrop to the pound remains worrying.