After yesterday’s extreme reaction to the Bank of England’s first rate hike in a decade, the markets were comparatively calm this Friday.
Sterling was not happy about the way in which Mark Carney and co. went about raising rates on Thursday. It was as dovish a hike as imaginable, the central bank making it clear that its sequel won’t be coming any time soon.
This sent cable to its worst price in around 2 months; it shows the extent of the pound’s fall that at below $1.305 it’s almost 3 cents away from Wednesday’s peak. Against the euro, where sterling had spent the last week climbing higher and higher, the fall was just as pronounced, with the pound plunging from €1.14 to €1.12 in a single session.
And it doesn’t look like the pound has the energy to recapture those losses this Friday. A weary open has seen it start the day flat against the euro and actually down 0.1% against the dollar, as the greenback eyes a potentially blockbuster non-farm figure this afternoon. This allowed the FTSE to build on yesterday’s gains, with its 0.3% rise pushing it back towards all-time high territory.
One thing that could help cheer up sterling is the latest services PMI. Both its manufacturing and construction peers have beaten estimates this week, meaning there is some chance that October’s reading could avoid the forecast fall from 53.6 to 53.3 month-on-month.
Disclaimer: Spreadex provides an execution only service and the comments above do not constitute (or should not be construed as constituting) investment advice or recommendations, or a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any person placing trades based on their interpretations of the above comments does so entirely at their own risk. Spreadex Ltd is a financial and sports spread betting and sports fixed odds betting firm, which specialises in the personal service and credit area. Founded in 1999, Spreadex is recognised as one of the longest established spread betting firms in the industry with a strong reputation for its high level of customer service and account management.
In relation to spread betting, Spreadex Ltd is authorised and regulated by the Financial Conduct Authority. Spread betting carries a high level of risk to your capital and can result in losses larger than your initial stake/deposit. It may not be suitable for everyone, so please ensure you fully understand the risks involved. In relation to fixed odds, Spreadex Ltd is licensed and regulated by the Gambling Commission under licence number.