The British Pound rose to a two-month high against the U.S Dollar on Thursday, buoyed by better-than-expected U.K. economic data. The GBP/USD reached a high of 1.2569 during the day, but later settled around 1.2530. The rally was supported by the release of upbeat UK services and composite PMI reports for November, which both beat market forecasts with readings of 50.5 and 50.1 respectively. The manufacturing PMI also showed resilience, rising to 46.7 amid a quieter trading atmosphere due to the US Thanksgiving holiday.
Today, the Pound continued to rally against the Dollar on the back of the upbeat PMI reports, but faced headwinds as the UK’s GfK Consumer Confidence fell more than expected to -24.0 amid growing concerns over the Bank of England Governor’s comments about continued high interest rates, suggesting recessionary pressures. This comes despite a recent drop in CPI inflation to 4.6%. In contrast to the Pound’s performance, the US Dollar Index (DXY) has rallied, supported by a jump in US Treasury yields, with the benchmark 10-year note hitting 4.46%. In addition, market sentiment is being influenced by expectations that the Federal Reserve may not raise interest rates further, as investors await upcoming declines in the US S&P Global Services and Manufacturing PMIs for more economic insight.
