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GBP continues to strengthen

GBP continues to strengthen

The strength of UK data continues with the PMI services survey comfortably beating market expectations for May. In contrast the same measure from the Eurozone was disappointing. Moreover, new business grew at the fastest pace for over three years and firms increased hiring to meet demand.

In the US, the May ADP employment change figures rose 135k up from the 113k reading in April but crucially below market expectations of 165k. This downside miss will leave the market more cautious about the full non-farm payrolls number due on Friday.

The big mover however is AUD – with the market pricing in further rate cuts from the RBA, GBP/AUD has hit yearly highs and the range is threatening to break into levels last seen in 2010. The pair has moved over 3.5% in two days.

GBP/USD rose to a high of $1.5408, breaking the $1.54 level for the first time since early May. GBP/EUR has broken into the high 1.1760’s.

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