GBP Tears Down As Euro Make Shaky Recovery

23 November 2021 | Updated: 23 November 2021

The GBP grinds lower during today’s session, New Zealand Dollar also lags behind other commodity currencies. The Euro and Swiss Franc, on the other hand, are currently the strongest currencies, followed by the Dollar and the Yen. However, it should be emphasized that the Euro’s rebound is relatively sluggish, and the possibility of a selloff resuming sooner or later remains considerable.

The UK Manufacturing Purchasing Managers’ Index rose from 57.8 to 58.2 in November, higher than the expected 56.7. The PMI Service Industry Index fell from 59.1 to 58.6, which was lower than the expected 58.5. The PMI composite index fell from 57.8 to 57.7.

Jonathan Haskell, a member of the Bank of England’s Monetary Policy Committee, said in a speech that “most of the changes in inflation are caused by global factors such as imported goods and energy prices.” He expects most of the changes to be “temporary”.

“The latest data continue to show that the labor market is tight, putting upward pressure on wages, he said. From the perspective of living standards, this is certainly good news, but from the perspective of inflation, this must match the increase in productivity, so we must remain vigilant.

The expected rise in bank interest rates from emergency levels-when it occurs-is not a mistake, but a feature, he added. “This reflects the success of the policy, mainly to support the financial and health of the economy during the pandemic. And science policy.”

GBP Fell to a Fresh 2021 Low Following Broad US Dollar Strength

The GBP is trading at 1.3370 at press time, just down 0.19 percent during the New York session. The mood in the market is gloomy, with US equities indices falling. Furthermore, the CBOE Volatility Index (VIX) is climbing by about 7%, causing a sell-off in the market as investors flee to safe-haven assets, benefiting the US dollar. Furthermore, risky currencies such as the GBP, AUD, and NZD prolong their losses throughout the week.

On the macroeconomic front, the IHS Markit PMIs for November were released by the US economic docket. The Manufacturing PMI increased to 59.1, exceeding expectations of 59. The Services Index increased to 57 but fell short of the 59.1 predicted. In addition, the Richmond Fed Manufacturing Index rose to 11 in November, more than the five projected.

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Azeez Mustapha

Azeez Mustapha is a trading professional, currency analyst, signals strategist, and funds manager with over ten years of experience within the financial field. As a blogger and finance author, he helps investors understand complex financial concepts, improve their investing skills, and learn how to manage their money.