On Tuesday, the Pound weakened as UK PMI indicated that high input costs caused problems for businesses while supply chain problems and staff shortages halted growth.
However, manufacturing and services data came in better than expected although this didn’t help to push the currency higher. There was a lack of support following comments from the Bank of England around inflationary pressures and that saw the currency finish at 1.1896 against the Euro and 1.3375 against the US Dollar according to the Foreign Exchange Market.
The Euro made some good gains in all areas on Tuesday as manufacturing and services PMIs increased, showing that the economy is growing and not shrinking. Despite this, surging Vodi-19 cases, as well as supply chain problems and increasing costs, mean that business confidence hit a ten-month low, preventing the single currency from making further gains.
The US Dollar stood firm yesterday as US Treasury yields firmed which helped to give support to the Greenback. The news of the reappointment of Jerome Powell as the Federal Reserve chair helped to secure expectations that rate hikes will take place in 2022, all of which help to strengthen the safe-haven currency.