Pound Sterling capitalizes on improved market sentiment, correction in US Dollar

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The Pound Sterling (GBP) has resumed its upside journey after a mild correction from its weekly high as investors expect an improvement in the United

Kingdom’s learning curve in handling the repercussions of higher interest rates by the Bank of England . Theis anticipated in the Pound Sterling ahead as UK Finance Minister Jeremy Hunt is expected to raise the minimum wage and ignore tax cuts at the annual Conservative Party conference. Apart from that, S&P Global Manufacturing PMI data for September will be keenly watched. The Manufacturing PMI is expected to remain below the 50.0 threshold for the 14th time in a row.

UK employers reduced their labor force in the last two months as firms aim to achieve efficiency through controlling costs in an uncertain demand environment. Services PMI has landed below the 50.0 threshold two times in a row, which indicates a contraction in service activities. Going forward, investors will focus on the announcement of a higher minimum wage by UK FM Jeremy Hunt at the annual Conservative Party conference. This weekend, UK Hunt announced, "We are waiting for the Low Pay Commission to confirm its recommendation for next year. But I confirm today, whatever that recommendation, we will increase it next year to at least 11 pounds an hour," as reported by Reuters.

The USD index remained volatile on Friday despite a soft core Personal Consumption Expenditure report for August. Monthly Core PCE expanded at a nominal pace of 0.1% in August against expectations and the former release of 0.2%. The annualized Core PCE has softened to 3.9% as expected from the former release of 4.3%.

 

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