The pound was flat against its major rivals during morning session, as January PMI services report came out better than previously anticipated. The gauge of services activity rose to 56 from 54 in December , the best reading since March 2011. However, the sterling is expected to remain volatile after Bank of England policymaker Adam Posen said yesterday the central bank could purchase assets other than gilts in the future. Mr Posen spoke as the central bank completed its 275 billion pounds asset purchase program to boost the economy. Market participants are going to pay close attention at BoE’s monthly meeting scheduled for next Thursday.
The euro consolidated versus the dollar as continuing uncertainty in Greece weight on the single currency. Financial ministers from the Germany, Finland, Luxembourg and the Netherlands will meet in Berlin today to discuss current issues in the region. Separately, the Eurozone Retail Sales unexpectedly dropped by 0.4% in December, lead by France and Germany. European households cut spending as governments step up austerity measures to contain the region’s fiscal crisis and as companies start to eliminate jobs. Also released today was the Eurozone PMI Services report, which came out slightly lower than previously expected.
The dollar consolidated slightly during the overnight trade before a report today shows US employers increased payrolls in January. Analysts expect for the US employers to have increased payrolls by 140,000 in January after rising by 200,000 in December. However, the headline unemployment figure is expected to remain unchanged at 8.5%. Expect for the dollar to remain in current ranges should the figure come out in line with expectations.
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