Sterling Traders Await BoE Meeting

Upcoming BoE meeting sends GBP lower; EUR/USD trades lower after the release of Service PMI.

Bank of EnglandWaiting for the upcoming monetary policy meeting of the Bank of England, Forex traders sent the pound sterling lower against its main rival, the US dollar. Helping to support the pound against the euro are the well-received distribution efforts of the vaccine to combat the coronavirus by the UK government; analysts expect that the fast pace of the distribution will provide a quicker economic recovery for the UK than is likely in the EU, where the distribution has not been well-planned. Tomorrow, the BoE is expected to publish the finding of the review of a negative rate environment; that prospect, though pushed back by the BoE, is still not entirely off the table.

In London trading as of 11:14 am, the GBP/USD was trading at $1.3636, down 0.01947: the pair has ranged from a peak of $1.36843 to a low of $1.36275 in today’s session. The EUR/GBP was trading up at 0.8812 pence, a gain of 0.025%, off the session high of 0.88238 pence, while the low was recorded at 0.88017 pence.


Eurozone PMIs Hit or Miss

Markets had been waiting for the Services Sector PMI reports to be released, and the various reporting agencies published the data earlier today. In the UK, Markit Economics reported that the January reading for the UK services sector was better than expected at 39.5 against a forecast of 38.8. France and Italy’s PMIs for their respective services sector was also unexpectedly better at 47.3 and 44.7, respectively, with analysts forecasting readings of 47 and 39.5. That helped to boost the EU’s figures, with a reading of 45.4 against an expected 45. Germany and Spain, the largest and 4th largest economies in the EU, failed to meet market forecasts with services sector readings of 46.5 and 41.7, respectively.

The EUR/USD was trading lower after the news at $1.2023, down 0.1503%.

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