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Pound Plummets as Manufacturing PMI Misses

Categories: AUD, CAD, EUR, GBP, Markets, News, NZD, USD
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Sterling



GBP/USD 1 Week Chart

The Pound (GBP) tumbled against the other majors on Monday as the latest manufacturing PMI showed that factory activity slowed in September.

Adding to Sterling’s woes were suggestions that Boris Johnson may be making a power grab for the Tory leadership as his recent comments appear to be aimed at undermining Theresa May.

Meanwhile, the Pound may retreat again this morning as economists forecast that the UK’s construction sector will also have slowed slightly last month.

Euro

The Pound Euro (GBP EUR) exchange rate fell by over half a cent yesterday as investors digested the UK’s latest manufacturing data.

However, the single currency began to relinquish some of its gains overnight as it was weakened by rising political uncertainty in the wake of the recent independence vote in Catalonia and the violence that followed.

The Euro may begin to advance again this morning, however, if the Eurozone’s PPI rises as expected in August.

US Dollar

Sterling witnessed its largest single day decline against the US Dollar (USD) since the UK election on Monday as investors feared the impact a possible Tory leadership challenge may have on the Pound.

The ‘Greenback’s gains were also aided by America’s own manufacturing PMI as it unexpectedly jumped from 58.8 to a new 13-year high of 60.8 in September.

Meanwhile USD investors will be looking to a speech by member of the Federal Reserve board of governors Jerome Powell as rumours circulate that he may be a potential candidate to replace current Fed Chair Janet Yellen in February.

Canadian Dollar

The Pound Canadian Dollar (GBP CAD) exchange rate slumped by over a cent on Monday as while the UK manufacturing PMI slipped last month, activity in Canada’s own factory sector climbed from 54.6 to 55 in September.

Australian Dollar

After tumbling over a cent yesterday morning, Sterling found some small respite against the Australian Dollar (AUD) overnight on Monday as the Reserve Bank of Australia (RBA) voted to leave interest rates on hold, while also indicating that they would likely remain that way for some time.

New Zealand Dollar

Concerns for the UK manufacturing sector and a possible falling out at the top of the Conservative party caused the Pound New Zealand Dollar (GBP NZD) exchange rate to relinquish almost of its gains from the previous week yesterday.

However, the ‘Kiwi’ may struggle to stabilise later this afternoon if dairy prices slide at the latest Global Dairy Auction.

TorFX Author: TorFX

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