GBP: Propelled higher by stronger than expected PMI readings – BBH

Analysts at BBH explain that the British pound is benefiting from the stronger than expected service and composite PMI readings.    

Key Quotes

“Among other things, the data are serving as a distraction from the government’s seemingly tortured approach to Brexit and the sales of part of its stake in RBS for a GBP2 bln loss.  Financials are a drag on the FTSE 100 today (~-0.5% while other major bourses are higher).”

“Sterling itself recovered from the around $1.3320 to almost $1.3385 on PMI news.    However, it stalled in front of yesterday’s high near $1.3400.  The UK’s service PMI rose for the second month, and the 54.0 reading compares with a 53.1 average in Q1 and 54.2 for all of last year.  Overall, the composite reading rose to 54.5 from 53.2.  It averaged 53.4 in Q1 and 54.7 in 2017.”