British Pound Weakens Against US Dollar on Disappointing PMI Data

The Bristish pound today declined against the US Dollar after the release of weak Markit/CIPS UK services PMI data. The GBP/USD currency pair declined for the third consecutive session losing over a cent from Friday’s tops amid renewed US dollar strength since the start of the week.

The cable lost over 50 points at the height of its decline as investors bought the US dollar and sold the British pound.

The UK Services PMI report from Markit Economics indicated that the UK services sector had deteriorated for the second consecutive month. The Services PMI came in at 53.4 versus the expected 53.5, which was still a decline from last month’s 53.8 figure. The Markit/CIPS UK Construction PMI released on Tuesday had also disappointed as it was recorded at 54.8 versus the expected 55 and the previous figure of 56. The Markit/CIPS UK Manufacturing PMI released on Monday had also disappointed. Chris Williamson the Chief Economist at Markit stated that it was “a triple-whammy of disappointing PMI survey readings.”

The US dollar declined slightly after the release of weak US factory orders data for May, which came in at -0.8% as compared to the expected -0.5%. The durable goods orders for May released by the Census Bureau exceeded expectations by coming in at -0.8% as compared to the estimated larger decline of 1.0%.

The cable’s short-term future performance is likely to be affected by the release of the minutes for the June FOMC meeting at 18:00 GMT.

The GBP/USd currency pair was trading at 1.2922 as at 15:00 GMT having retraced some of its losses from a low of 1.2893. The GBP/JPY was trading at 146.41 having recovered from a low of 145.98.

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