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Weekly roundup: Pound under pressure thanks to disappointing UK PMIs

currency-newsWeekly roundup: Pound under pressure thanks to disappointing UK PMIs
Signs continued to point towards a weakening of the UK economy in October as both the manufacturing and services PMIs fell to multi-month lows, leaving the pound on a weaker footing.

Uncertainty over Brexit showed increasing signs of weighing on domestic growth at the start of the fourth quarter, with business confidence and growth in new orders declining on the month.

Raising concerns that the UK economy could lose further momentum in the final quarter of the year, this left the pound on a generally weaker footing against its rivals.

The Bank of England’s (BoE) November policy meeting offered some support to GBP exchange rates, however, as policymakers kept the option of an interest rate hike on the table.

Although the matter of Brexit is likely to keep the BoE on hold for some months to come the prospect of further monetary tightening was still enough to boost the pound.

Confidence could take a fresh hit ahead of the weekend, though, if the third quarter UK gross domestic product fails to impress.

Unless GDP shows an uptick on the quarter as forecast the pound looks vulnerable to a fresh selloff, especially if the latest UK trade and production figures also disappoint.
 
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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