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GBP breaks 1.1800 barrier vs EUR

GBP breaks 1.1800 barrier vs EUR

This morning has seen GBP/EUR back above 1.1800. In spite of broadly positive news from Eurozone data yesterday, EUR proved unable to recover ground lost against Sterling.

The British pound broadly strengthened in response to strong UK manufacturing and housing figures, and is being further supported by market expectations that the Bank of England will vote to maintain its bond-buying stimulus program at its current level and hold the interest rate at 0.5%  when it meets on Thursday.

In the early hours of this morning, The Reserve Bank of Australia confirmed they would be keeping interest rates on hold at 2.5%. As a result we saw AUD strengthen across the board – versus GBP the rate fell back below the 1.7300 mark.

This afternoon, markets will focus on US Manufacturing data; The Institute for Supply Management (ISM) Manufacturing Index shows business conditions in the US manufacturing sector and is a significant indicator of the overall economic condition in US. If we see a solid number we could see USD strengthen from 2pm this afternoon.

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