GBP/USD Declines After UK Manufacturing PMI Misses Expectations

The Great Britain pound was falling against the US dollar during the current trading session and accelerated its decline after a private report showed slowing growth of Britain’s manufacturing sector. The sterling was flat against such rivals as the euro and the Swiss franc and managed to rally against the Japanese yen.

The IHS Markit/CIPS UK Manufacturing PMI dipped from 56.3 in May to 54.3 in June. That was a complete surprise to analysts as they had predicted the indicator to stay virtually the same. The report said:

While the survey data add to signs that the economy is likely to have shown stronger growth in the second quarter, further doubts are raised as to whether this performance can be sustained into the second half of the year.

The unfavorable data led to speculations that the hawkish stance of the Bank of England was unwarranted and the central bank will not be able to raise interest rates in the near future. Yet considering that the pound held steady against most of its rivals, the majority of traders did not think that way and remained relatively bullish on the currency.

GBP/USD dropped from 1.3000 to 1.2939 as of 19:54 GMT today. EUR/GBP hanged at 0.8779, close to its opening level of 0.8776. GBP/JPY rallied from 145.75 to 146.76, trading near the highest level since May 16.

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