The UK Services PMI for January exceeded market expectations, providing a significant boost to the British Pound against the US Dollar. The Preliminary UK Services Business Activity Index rose to 51.2, surpassing the anticipated 50.6 and the prior month's 51.1 reading. This positive surprise in the data supports the GBP/USD pair, which is adding 0.68% on the day and trading at a two-week high near 1.2450.
Market analysts had expected the index to be at 47.1, but the better-than-anticipated data has helped the Pound Sterling gather strength. The strong performance of the services sector signals potential resilience in the UK economy amid ongoing global challenges. The seasonally adjusted S&P Global/CIPS UK Manufacturing Purchasing Managers’ Index (PMI) also ticked higher to 48.2 in January, up from 47 in December.
In light of the impressive data, market participants are considering the implications for future monetary policy. The Federal Reserve has signaled that further policy loosening would require evidence of economic weakness and more subdued inflation prints after a series of 100 basis point rate cuts. However, current data suggests that such conditions may not be met immediately.
On a broader scale, President Trump's low tax and light-touch regulation policies are perceived as favorable for economic growth. These policies could further influence market dynamics and investor sentiment moving forward.
The GBP/USD pair continues to extend its weekly uptrend, reaching new highs and maintaining momentum in the current trading session. The British Pound was notably strong against the US Dollar, benefitting from the robust PMI figures. Meanwhile, the EUR/USD pair also gathered bullish momentum, rising toward 1.0500 during the European session on Friday.
The upbeat PMI data from Germany and the Eurozone has contributed to this positive sentiment, as it indicated an expansion in private sector business activity for January. This development provides additional support to the Euro, enhancing its competitive stance against the US Dollar.
In the cryptocurrency market, Dogelon Mars (ELON) continues its rally, experiencing significant gains with an increase of over 18% this week. The positive performance of ELON highlights investor interest and market volatility within the digital asset space.