Sterling enjoyed some of its most significant daily gains in over a month following the release of the monthly Manufacturing PMI figure. Anticipated to reach 49.1 the data surpassed and startled registering a very positive 53.3, a ten-month high no doubt silencing more post Brexit gloom.
FX markets reacted accordingly and GBP/EUR moved from 1.1808 to a day high of 1.1912 at 2pm (9GMT). GBP faired just as well against the vast majority of the majors including the USD. Sterling currently sits at around 1.3275 against the US dollar briefly breaching the 1.33 mark before returning.
Manufacturing was assisted by the weaker pound and generation of new orders within the domestic market and overseas markets. Growth outside of the UK included new interest from USA, Europe, China, Middle east and Asia
The Pound could have further opportunities to gain lost ground early next week with the release of the Services PMI on Monday. The Services sector represents roughly 80% of the UK’s GDP therefore a much larger portion than manufacturing and therefore a positive reading could see the pound potentially push much higher. Likewise, a poor figure could also have the potential return the Pound back to post Brexit levels.
The US also had an important data release this afternoon in the form of weekly Unemployment claims which showed fewer Americans had filed for unemployment benefits that anticipated. It was expected that 265,000 would file for jobless claims however the data was slightly better than expected showing 263,000 had claimed. Although this represented a slight rise compared to last week’s figure of 261,000 it keeps the FED hike plan on track and unlined the strong labour market.
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