Pound Climbs After Strong Economic Data


The pound was higher against its major opponents in the European session on Monday, as strong factory data from the Eurozone and the U.K. underpinned risk sentiment.

IHS Markit’s final Manufacturing Purchasing Managers’ Index (PMI) fell to 54.8 in January from December’s 55.2 amid renewed lockdown measures across the continent. However, that was a tad above the initial 54.7 “flash” estimate.

The U.K. manufacturing sector activity improved more-than-expected in January, with the final PMI rising to 54.1 versus 52.9 expected and 52.9 in the first readout.

A spike in demand for silver propped up the mining shares, as retail traders turned their focus to the precious metals.

Concerns over AstraZeneca/EU vaccine spat eased after the drug maker pledged to deliver 9 million additional doses in the first quarter.

The pound jumped to 1.2294 against the franc, its strongest level since March 2020. Next key resistance for the pound is seen around the 1.24 level.

Preliminary data from the Federal Statistical Office showed that Switzerland’s retail sales increased in December.

Retail sales adjusted for sales days and holidays rose by 4.7 percent year-on-year in December.

The pound rallied the most in a year against the yen, at 144.10. The pound is seen finding resistance around the 146.00 mark.

The latest survey from Jibun Bank showed that Japan manufacturing sector fell into contraction in January, with a PMI score of 49.8.

That’s down from 50 in December, which was right on the line that separated expansion from contraction.

The pound reached as high as 0.8906 against the euro, a level not seen since May 2020. On the upside, 0.86 is possibly seen as its next resistance level.

In contrast, the pound pulled back to 1.3698 against the greenback, from a 5-day high of 1.3758 seen at 3:00 am ET. The pound may locate support around the 1.34 level.

Looking ahead, U.S. ISM manufacturing PMI for January and construction spending for December are set for release in the New York session.

The material has been provided by InstaForex Company – www.instaforex.com


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