Cable Reclaims 1.60 in Wake of Positive PMI Data
Services PMI Sheds Positive Light on UK Economic Recovery
Financial data company Markit reported on Monday that the UK Services Purchasing Managers Index rose to 62.5 in October, up from 60.3 in September, indicating the sharpest rise in over 16 years. Analysts had expected a reading of 59.8.
The figure, reflecting a robust services sector, spurred a GBP/USD rally of almost 100 pips, launching the pair back above the major psychological level of 1.60. Resistance lies overhead around the prior high of 1.6254.
Spanish Employment Data Disappoints
Weak Spanish employment data weighed on the euro during the London trading session.
Spain, the fourth largest economy in the eurozone, has a current unemployment rate of 26.6 percent, according to Eurostat.
The Spanish Government reported on Tuesday that the number of unemployed in Spain rose by 87K in October, from an increase of 25.6K the prior month. Analysts expected the figure for unemployment growth to come in much lower at 31.3K.
ISM Non-Manufacturing PMI
The Institute for Supply Management reported that its services index to 55.4 last month, beating analyst expectations.
A reading above 50 indicates that the non-manufacturing sector economy is expanding. The US Dollar rallied in the initial reaction to the news.
Major Economic Data Ahead
Key interest rate policy announcements from the UK and the eurozone are scheduled for release this Thursday. Concerns over deflation in the eurozone has fueled speculation over a possible ECB rate cut. Additionally, the week will be capped on Friday morning by pivotal employment data out of the US and Canada.
US Dollar Index Daily Chart - the greenback has moved modestly higher in Tuesday trading, indecisive ahead of the slew of major economic data.
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