The pound was already on the up and up and now it has another reason to rise. The manufacturing PMI for October came out at 56.3 points, better than 55.8 expected and on top of an upwards revision for September, from 55.9 to 56. This is the first out of three purchasing managers’ indices.
GBP/USD is holding on to the high ground above 1.33. The high so far is 1.3320. Support awaits at 1.3280, with a further cushion at 1.3220. Resistance is at 1.35.
The bigger driver of the pound is the expected rate hike tomorrow. The Bank of England is set to raise rates for the first time since the financial crisis. What remains unclear is if Mark Carney and co. will signal that this hike is a one-off or not.
The BOE cut interest rates in the aftermath of the EU Referendum back in August 2016. The response to Brexit pushed the pound lower, inflation higher and now they want to undo this move.
But will they signal the beginning of a tightening cycle as well? UK GDP looks good and so does this PMI.
More: GBP/USD: ‘Gotta Have Faith’ To Go Long Sterling On ‘Carney Put’ – ING
