Sterling climbed to new highs but could be at risk of a sell-off if the Bank of England releases a statement with its monetary policy decision in order to curb enthusiasm about the British economy and higher interest rates. The pound raced to a three-and-a-half-month high against the euro after UK services growth hit another six-year high. The US dollar has risen across the board as investors weigh a number of event risks such as the G20 meeting which will bring together the US and Russia, and possibly intensify the debate over Syria. The greenback’s gains also come ahead of US economic data which may set up a positive run for the currency into more critical US unemployment and payrolls reports. The euro remains under pressure and near one-and-half-lows against the US dollar before the European Central Bank makes a decision on interest rates, and ECB President Mario Draghi takes questions from the press after.
Sterling
Sterling jumped to a three-and-a-half-month high against the euro as traders extend the British currency’s outperformance after another robust PMI survey bolstered optimism about the UK economy’s recovery and Bank of England monetary policy. The closely watched UK services PMI showed growth in Britain’s key sector increased to a fresh six-year high.
US dollar
The US dollar is up across the board and has hit its highest level since July 25 against the yen as investors take a risk-off approach to trading before G20 leaders gather as the debate about the Syrian crisis escalates. At the same time, analysts are expecting to see US data to show solid growth in the services sector, a drop in weekly jobless claims and ADP’s monthly employment survey to bolster the US dollar ahead of more crucial unemployment data.
Euro
The euro remains under broad pressure and near one-and-a-half-month lows against the US dollar in front of European Central Bank policy announcement and press conference. Data showing a rise in unemployment in France underlined worries that despite the eurozone economy returning to growth last quarter, President Mario Draghi will repeat the ECB’s dovish “low or lower rates” message. Another concern for euro traders is the German election campaign highlighting the fact that some peripheral countries may require more emergency financial aid over the coming months.