This morning the Pound Sterling (GBP) exchange rate news focuses on the British currency posting widespread declines. Both the GBP/EUR and GBP/USD pairings have fallen by more than 0.3% following the release of the UK’s Manufacturing PMI.
The Pound weakened against the Euro (EUR), US Dollar (USD), Australian Dollar (AUD) and New Zealand Dollar (NZD) after the Markit gauge of manufacturing fell from 57.5 to 55.4 in July.
A more temperate easing to 57.2 had been anticipated.
UK data has had a nasty habit of coming in below forecast over the last few weeks and this report acts as yet another sign that the UK’s economic recovery might be petering out.
Yesterday’s Nationwide House Price figures revealed an extreme reduction in house price growth while the GfK Consumer Confidence gauge declined for the first time in six months.
However, while the PMI showed a slowing in the pace of new order and output growth, it did detail another increase in payroll numbers and the 55.4 figure was solidly in expansion territory.
Markit economist Rob Dobson said of the data; ‘The Bank of England [will] not be overly worried by the weaker numbers. Policymakers were expecting growth to slow slightly from the impressive rate seen in the first half of the year, in part due to expectations of higher borrowing costs next year. […] The concern in that the slowdown we are seeing is also a symptom of increased economic uncertainty both at home and in key export markets in Europe.’
After the report was published the Pound Sterling to Euro (GBP/EUR) exchange rate fell to a low 1.2564.
The Pound Sterling to US Dollar (GBP/USD) exchange rate slumped to a low of 1.6824.
Pound Sterling Exchange Rate Forecast
Although Manufacturing PMI reports for the Eurozone and several of its largest economies also fell short of forecasts, the Pound Sterling to Euro (GBP/EUR) exchange rate is likely to remain trending in a softer position into the weekend.
Meanwhile, the Pound Sterling to US Dollar (GBP/USD) exchange rate could extend declines later today following the publication of the highly anticipated US Non-Farm Payrolls report. Another month of strong jobs growth data could give the US Dollar another considerable boost before the weekend.
Next week we can look forward to a stream of influential economic reports for the UK, including the nation’s Construction, Services and Composite PMI. If these measures of output also show a decline from June’s levels the Pound will come under further pressure.
UK Manufacturing and Industrial Production figures will follow, as will the National Institute of Economic and Social Research’s GDP estimate for July.
The main UK news of the week will be the nation’s Bank of England interest rate decision.
Policy is not likely to be altered but any comments emerging before or after the meeting which refer to the interest rate outlook could have an impact on the British currency.
The Pound Sterling (GBP) Exchange Rate is currently trading in the region of 1.2568 against the Euro and 1.6833 against the US Dollar.
Pound (GBP) Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Pound Sterling,
,US Dollar,1.6833,
Pound Sterling,,Euro,1.2567,
Pound Sterling,,Australian Dollar,1.8031,
Pound Sterling,,New Zealand Dollar,1.9840,
US Dollar,,Pound Sterling,0.5926,
Euro,,Pound Sterling,0.7954,
Australian Dollar,,Pound Sterling,0.5498,
New Zealand Dollar,,Pound Sterling,0.5037,
[/table]
Comments are closed.