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Less Risk Appetite But Sterling Steady

Less Risk Appetite But Sterling Steady

UK preliminary manufacturing and servicing PMI’s both fell to 11-month lows, falling below forecasts. Strong increase in inflationary pressures, input costs and selling prices on the services side will maintain market expectations of Bank of England rate hikes, but overall the data was overshadowed by general coronavirus restriction easing.

The Pound continued to ebb as risk appetite worsened, equity markets shed billions and safe haven became more attractive in light of Putin parking tanks on the Ukraine border. Sterling dipped below 1.3450 to the dollar before rising to 1.3485, while the Euro pushed to highs around 1.1870 before settling near 1.1900.

In the US there was some caution ahead of tonight’s Federal Reserve policy decision, despite turmoil in equities markets expect that the bank would signal a rate hike announcement in March.

Risk appetite dropped again this morning but Sterling appears steady, opening near 1.3475 to the dollar with the Euro near 1.1900.

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