Sterling ‘made broad gains’ following services data

<p>The release of services data boosted sterling.</p>

Sterling got a major boost from the release of UK services data yesterday (June 5th) and was up strongly against both the euro and the dollar.

Andy Scott, premier account manager at foreign currency exchange brokers HiFX, noted the figures were better than expected and show the UK's economy appears to be "holding its own" even though much of the eurozone is still struggling in recession.

He pointed out it is likely sterling continues to perform well against the single currency in the coming weeks and months, but noted the new governor of the Bank of England could have an impact on the pound.

Mark Carney – currently in charge of the Bank of Canada – is set to take over the role from Sir Mervyn King and Mr Scott warned that the Bank of England may try to "turbo charge" the slow economic growth seen in the first quarter of the year.

"This unknown will continue to limit sterling's upside due the risk of sterling dropping due to such central bank action," he said.

Sterling rose 0.4 per cent to $1.5372 yesterday, as well as being up by 0.4 per cent to €1.1758.

Learn about the sterling and forex trading at City Index

Build your confidence risk free
Join our live webinars for the latest analysis and trading ideas. Register now

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.