Sterling gains on euro despite services data

Story link: Sterling gains on euro despite services data

The US dollar strengthened again on Thursday after the ISM non-manufacturing survey for April came in at 56, up from 52.4 in March. The result was higher than expected, as was Tuesday’s manufacturing sector survey. With US employment figures due Friday, some analysts were of the opinion that sentiment toward the dollar is now more pessimistic than warranted by economic data.

At mid-afternoon in New York, the greenback was 0.1 percent higher in relation to sterling, to $1.9870, while it had added 0.2 percent versus both the euro and the Japanese yen to $1.3560 and ¥120.35 respectively.

The euro rose to yet another record high versus the yen during the session before dropping back to a loss of 0.1 percent against the Japanese currency to ¥163.50. There was little reaction in the shared currency to new data that showed Eurozone producer price inflation down slightly in March, and analysts are still convinced that the European Central Bank will raise the interest rate there to 4 percent in June.

Sterling was up by 0.1 percent versus the euro, to £0.6826 even though the UK services Purchasing Managers’ Index was down to 57.2 in April from 57.6 in March. Some analysts took this as evidence that higher interest rates are still not having much of an effect on the UK economy.