British Pound May Rise As PMI Data Bolsters BOE Rate Hike Bets
Dailyfx | May 01, 2015 02:29AM ET
Talking Points:
- British Pound May Rise as PMI Report Bolsters BOE Rate Hike Speculation
- NZ Dollar Sank Overnight as FinMin English Reinforced RBNZ Easing Bets
- See Economic Releases Directly on Your Charts with the DailyFX News App
The UK Manufacturing PMI report headlines the economic calendar in European trading hours. Factory-sector activity growth is expected to accelerate for a fourth consecutive month in April, hitting the fastest pace since July 2014. A rosy outcome may fuel continued improvement in Bank of England monetary policy expectations, sending the British Pound higher. Rate hike bets have been firming since late March, with traders now leaning toward at least one 25bps increase in the next 12 months.
The New Zealand Dollar underperformed in otherwise quiet overnight trade, falling as much as 0.6 percent on average against its leading counterparts. The played out against a backdrop of ominous comments from Finance Minister Bill English, who hinted that he expects the RBNZ to cut interest rates if inflation remains low “for quite some time”. English added that price growth has been “lower than expected [and that has been] more persistent than expected”. NZDUSD may be readying to break downward.
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