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21/08/24
59
GBP Reached 1-Month High Ahead of UK PMIs
On Wednesday, the British pound showed limited movement after a 4-day rally in which it soared 1.7% against the US dollar. GBP/USD traded at about 1.3047, up 0.1% for the day in the North American session.
The yearly meeting at Jackson Hole has additional significance this year as it is expected the Fed will deliver a rate cut in Sept. Fed Chair Powell will deliver a speech at the gathering on Friday and investors will be watching for clues about the Sept. move.
The Fed has kept its benchmark rate at between 5.25% and 5.5% for more than a year and all indications are that it will make an initial rate cut at the Sept. 18 meeting.
The most likely scenario is a 0.25% cut but the financial markets were routed earlier this month and expectations for a 0.5% cut increased. As the markets have recovered, a 0.25% cut is once again the most likely.
On Thursday the July PMI report for the UK will be will be released. The services and manufacturing sectors are both growing, as the economic picture in the UK has improved. The services PMI is expected to edge up from 52.8 in June to 52.9. The manufacturing PMI is projected to stay at 52.1.
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