- The Pound Sterling moves higher on upbeat UK Retail Sales and flash PMI data.
- UK Retail Sales rose by 0.4% MoM, beating market consensus of a contraction at a steady pace of 0.1%.
- The Federal Reserve is seen leaving interest rates steady in the monetary policy meeting next week.
The Pound Sterling (GBP) rises strongly against its major currency peers, jumps to near 1.3536 against the US Dollar (USD) as the flash United Kingdom (UK) S&P Global Purchasing Managers’ Index (PMI) data for January has come in stronger than projected, and Retail Sales have returned to growth in December.
The PMI report showed that the overall business output grew strongly due to a sharp increase in both manufacturing and the services sector activity. The Composite PMI jumped to 53.9 in January from 51.4 in December, also beating estimates of 51.7.
The Services PMI has come in at 54.3, higher than the 51.7 estimate and the prior release of 51.4. And, the Manufacturing PMI rose sharply to 51.6 from the previous reading of 50.6.
Meanwhile, Retail Sales figures have grown in December, after contracting in the last two months. The Office for National Statistics (ONS) has reported that Retail Sales data, a key measure of consumer spending, rose by 0.4% month-on-month (MoM), while it was expected to decline steadily by 0.1%.
On an annualized basis, the consumer spending measure grew strongly by 2.5% against the market consensus of a rise at a moderate pace of 1%, from 1.8% in November, which was revised higher from 0.6%.
Strong UK Retail Sales data is expected to weigh on market bets for interest rate cuts by the Bank of England (BoE) in the near term.
Next week will be light in terms of UK economic data, and market sentiment and expectations for the Bank of England’s (BoE) monetary policy outcome at the February meeting are set to drive the Pound Sterling.
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