On Wednesday, the Pound was range bound with a lack of movement, much of which was waiting on the latest rate decision from the Bank of England.
Yesterday, the only data driving the Pound was the latest PMI figures which indicated that the UK service sector had contracted during January. So, at the end of trading on Wednesday, the Foreign Exchange Market showed that the Pound finished at 1.1336 against the Euro and 1.36448 against the US Dollar.
Euro exchange rates followed the same direction yesterday as they continued to move downwards. However, the trend continued even though there was a strong rebound in inflation during January as indicated by the Eurozone’s consumer price index. The latest retail figures are likely to have an impact on the single currency, especially if it highlights that Germany suffered a significant drop in sales during December.
The US Dollar set itself up well yesterday and remained strong against most of its peers as it took advantage of increasing treasury yields. Despite this, some of the gains were lost after ADP employment figures and ISM non-manufacturing PMI were the strongest seen for two years.