The pound has rallied to a four and a half month high against the dollar this morning, mainly due to the dollar’s weakness. The pound is weaker against the euro, however, as no developments are expected from UK-EU trade talks this week.
Positive UK PMI data on Friday lifted sterling out if its rut, as it strengthened against both the euro and the dollar. Both Services, Manufacturing and Composite PMI data beat forecast and showed growth in all sectors after collapsing in lockdown.
This data came on top of positive retail sales data and consumer confidence figures which were released earlier in the day. However, investors have remained cautious as growth does not necessarily mean that the economy has fully recovered. The data also revealed that the sharp drops seen in March and April have not been made up for yet.
This week, housing and mortgage data will be released. This morning, manufacturing PMI figures will be released and are due to remain in contraction territory.
