Schedule pound to dollar at intervals of 4 hours
The Bank of England may raise the pound at its monetary policy meeting on May 6, as the central bank is likely to remain optimistic about the economic recovery following the release of strong UK data on Friday, UBS Global Wealth Management reported.
According to UBS economist Dean Turner, April surveys of purchasing managers for manufacturing and services in the UK showed a positive impact from easing quarantine restrictions, while retail sales data for March signals that consumers and companies are ready to meet pent-up demand.
“We expect the Bank to post a moderate recovery when reviewing the outlook for economic growth, which is likely to leave them in a hawkish mood.”
According to him, this should support the pound, which is likely to strengthen against the euro and dollar during the year.
Sterling widened losses against the euro and cut gains against the dollar after April surveys of UK manufacturing and service purchasing managers showed declining export sales and rising inflationary pressures as trade tensions associated with Brexit persist.
The IHS Markit / CIPS UK manufacturing PMI rose to 60.7 in April from 58.9 in March, while the services PMI rose to 60.1 from 56.3. Levels above 50 indicate increased activity.
“There is some cause for concern, however, as export figures remain relatively weak, often linked to post-Brexit trading conditions, and prices continue to skyrocket,” says Markit’s Chris Williamson.