The
pound traded near its highest level since December 2019 versus the U.S. dollar,
resuming its advance for a third straight session, taking advantage of the
dollar’s weakness as Fed Powell pledge to keep loose monetary policy.
The
GBPUSD traded higher at 1.3455, where the highest level was hit at 1.3482,
after it recorded a sharp weekly gain last week.
At
Jackson Hole Symposium last week, Fed Chair Jerome Powell vowed to keep the
loose monetary policy even if inflation surpassed the central bank's objective,
pushing the green currency lower against major currencies.
The
dollar index plunged this week to the lowest level since May 2018 at 91.72,
noting that it locked its fourth monthly decline by the end of August.
The
improvement in sentiment mainly helps stocks and pound at the expense of
refuges, led by the U.S. dollar.
Data
released today from the U.K. showed that manufacturing PMI edged up to 55.2
in August, compared to 53.3 in July, reflecting improvement after
the ease of lockdown measures.
“Manufacturing
production rose at the fastest pace since May 2014, reflecting solid expansions
across the consumer, intermediate and investment goods sub-sectors,” Markit
said.
Versus
the euro, the pound pushed the EURGBP pair down to a low of 0.8892, which is
the lowest since June 10.
Eurozone
final manufacturing PMI came in at 51.7, down slightly on July’s reading of 51.8,
where both France and Spain clawed back to contraction region.
Later in the day,
U.S. ISM manufacturing PMI for August may signal a widening expansion to 54.6
from 54.2 in July.