Sterling Shows Resilience in Face of Poor Data from Britain

The Great Britain pound rallied today against some of its major rivals, though not against the euro, even as macroeconomic data released in the United Kingdom over the trading session was rather poor.

The seasonally adjusted IHS Markit/CIPS UK Construction PMI slumped from 51.4 in February to 47.0 in March, far below the consensus forecast of 50.9. The index fell below the neutral 50.0 level for the first time in six months, meaning that the sector turned from expansion to contraction. The report blamed weather uncharacteristic for March, snow in particular, for that.

British Retail Consortium reported that the Shop Price Index dropped 1.0% in March, following the 0.8% decline in February. The report explained the drop by substantial slowdown of food inflation.

Despite the negative economic data, the sterling showed surprising resilience. The probable explanation for such behavior was the fact that European currencies were less threatened by trade wars between the United States and China than American, Asian, or South Pacific ones.

GBP/USD was up from 1.4052 to 1.4076 as of 17:10 GMT today. GBP/JPY bounced to 149.98 following the drop from 149.85 to 148.80 earlier. At the same time, EUR/GBP traded at 0.8730, not far from the opening level of 0.8727, after jumping to 0.8759.

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