The pound came under selling pressure in yesterday’s session, and had to give up the lofty 1.19 level against the euro. Analysts pointed at the souring of investor sentiment on global markets as the main culprit.
In the mid- to long term the story is different however, as prospects of a December interest rate by the bank of England firmed further. The November PMI readings show that price pressures continue unabated, with higher readings than originally forecast. This is also corroborated by businesses in the private sector, with 63% of UK private sector companies reporting an increase in average cost burdens this month.
Furthermore, there are also concerns that the record number of vacancies in the UK will cause upward wage pressure, adding further fuel to the fire for inflation levels.
In other currency news, the USD continued its stellar run against the EUR. After upbeat data related to growth in the German private sector, the greenback firmly took the reins again. The pair is trading at 1.125 at time of writing.
Have a great day.
Thomas De Caluwé, Relationship Manager.
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