Pound Gains In Spite Of Weak UK PMI Manufacturing Data

Published: Thursday, 1 November 2012 15:00 BST - Written by Toni Johnson

STORY LINK Pound Gains In Spite Of Weak UK PMI Manufacturing Data

The sole UK data release of significance so far today provided a disappointment for investors holding Sterling-denominated assets. October’s Purchasing Manager Index for the British Manufacturing sector showed a downward move in activity levels to 47.5 in comparison with September’s showing of 48.1, (which was also downwardly revised). It was a worse than anticipated result for the key sector of the UK’s economy, but in truth, the release did not provide market participants with any new information; investors were already fully aware that Britain’s real economy is facing up to manifold difficulties thanks to the decimating effect of 2007’s global credit crisis and the subsequent downward multiplier effect of the British coalition government’s austerity measures.

The Pound has enjoyed a solid day so far, in spite of the PMI figure, making gains against the majority of the other major currencies, with the exception of the New Zealand Dollar. However, tomorrow morning’s PMI Construction survey has the potential to trigger renewed downside for the British tender.

Elsewhere, this afternoon has seen the release of further encouraging US labour market data. The American Initial Jobless Claims figure for the week of 27th October revealed a lower than anticipated number of new claimants in the States. ADP Employment Change data, released at the same time, showed that 158,000 new jobs had been generated during October in the world’s leading economy, well ahead of the expected 135,000. The American jobs number have sent the Dollar lower against the Pound, due to increased investor sentiment in the US. The GBP USD exchange rate currently stands at 1.6160, having touched 1.6175 earlier today.

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