Pound Inches Higher on Upbeat PMI
After several days of enduring a downtrend, the Pound Sterling edged higher against the US Dollar, supported by the return of risk appetite on news that the construction industry in the UK experienced its fastest growth in seven months. The June Construction Sector PMI report issued by Markit Surveys came in with a reading of 53.1, well above the flat reading of 52.5 called for in the most recent poll. After a contraction in March, the sector has now seen three consecutive months of improvement.
As reported at 11:20 am (BST) in London, the GBP/USD was trading at $1.3192, a gain of 0.41% and just off the session peak of $1.3196; the low for the trading day was recorded at $1.3115. The GBP/JPY is currently trading at 146.29 Yen, up 0.48%; the pair has ranged from a session trough of 145.292 Yen to a peak of 146.386 Yen.
Sterling Outlook Still Uncertain
Currency strategists say that traders are still wary of Sterling's ability to maintain its position relative to major currencies, especially given the Brexit talks. While the UK Prime Minister seems prepared to soldier onward in this week's negotiations, the bottom line is that the UK government is not even remotely close to hammering out a favorable deal. Analysts also point out that though the lift for the Pound relative to today's PMI data may be brief, it does offer some hope for FX traders as the numbers will be considered in the next survey for 2nd quarter GDP. That information would be considered by the Bank of England when determining monetary policy and rate adjustments.