The British pound today weakened against the US dollar after the release of weak UK manufacturing PMI data early in the European session. Several releases from the US docket such as the ISM Manufacturing Index in the early North American session also drove the British pound lower against the greenback.
The GBP/USD currency pair was on a downtrend for most of today’s session losing about 130 points at the height of its steady decline.
The currency pair’s steady decline was triggered by the release of disappointing IHS Markit/CIPS UK Manufacturing PMI data by IHS Markit. The PMI data came in at 55.9 versus the expected 56.2, which indicated that the UK manufacturing activity was expanding at a slower rate than expected. The stronger US dollar also contributed to the pair’s decline as investors priced in a FOMC rate hike in December. There was also positive sentiment towards President Donald Trump‘s tax reform plan, which boosted the greenback.
Several positive releases from the US docket also contributed to the pair’s decline. The IHS Markit US Manufacturing PMI beat expectations as it was recorded at 53.1, as compared to the market consensus of 53.0. The ISM Manufacturing PMI for September also exceeded expectations by coming in at 60.8 as compared to the expected 58.1. The ISM Employment Index also beat the previous figure by coming in at 60.3 versus the previous 59.9.
The currency pair’s future performance is likely to be affected by tomorrow’s release of the Markit/CIPS UK Construction PMI and political developments in the USA.
The GBP/USD currency pair was trading at 1.3266 as at 16:02 GMT having dropped from a high of 1.3396 at the start of today’s session. The GBP/JPY pair was trading at 149.35 having declined from a high of 150.94 earlier today.
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