Entering into US session, Sterling is so far the strongest one today as lifted by upside surprise in UK services PMI. August BoE hike is back on the table after the current batch of May PMIs. But it’s far from being certain. As BoE MPC member Silvana Tenreyro pointed out, BoE opted to wait a little longer in May to have better assessment on the outlook. Her comments argued that August is probably time. But then, it’s totally data dependent. The MPC will still have two months of data in June and July to digest. If incoming data doesn’t feel right, BoE could decide to wait a little longer again in August after having waited that little longer.

Technically, it should be noted that while GBP/USD rebounded it’s kept below yesterday’s high at 1.3397. GBP/JPY was a bit better as it breached yesterday’s high at 146.88 but there was no follow through buying. EUR/GBP is also held above yesterday’s low at 0.8727. So, up still now, the pound’s rise is rather forgettable.

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Another point to note is that commodity currencies are trading generally lower today, and there is some fresh selling in Canadian Dollar at the time of writing. We’ll see if that would drag down the Australian Dollar too.


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