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Weekly Roundup: Coronavirus cases and downgraded UK services PMI weakens pound

currency-newsWeekly Roundup: Coronavirus cases and downgraded UK services PMI weakens pound
While the initial March services PMI reading had shown a sharp loss of economic momentum the index’s downward revision still weighed heavily on GBP exchange rates.

As the service sector remains the primary driving force of the UK economy this evidence of a deeper decline saw the pound fall out of favour once again.

Although the corresponding manufacturing PMI saw a slight upward revision this failed to ease anxiety over the economic outlook.

With the fallout of the Covid-19 lockdown looking set to hang over the economy for the foreseeable future the potential for GBP exchange rate gains rapidly diminished.

The release of February’s monthly gross domestic product reading could offer the pound a temporary boost, however.

As growth is expected to show a modest 0.1% uptick on the month this may help to put a floor under GBP exchange rates.

If the growth rate stagnates for another month, though, this would add to expectations of a significant slump in the upcoming first quarter gross domestic product and leave the pound vulnerable to selling pressure.
Philip McHugh

Philip McHugh

Joining the corporate trading desk in 2007, Phil now over sees all of Currencies Direct’s corporate dealing activity. Having gained experience working with hundreds of businesses to optimise international payments processes and execute comprehensive risk management strategies, Phil currently works with a portfolio of corporate clients whilst managing Currencies Direct’s overall market exposure

Phil has FCA approval and has completed the Certificate in International Treasury Management (CertiTM)

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