Pound Lower Despite Upbeat PMI
The Pound Sterling had moved lower while worried FX traders awaited the latest economic data from the UK. However, despite the news that the Markit Manufacturing Data for June had actually beaten expectations with a reading of 54.4 (against forecasts of 54.0), the Pound could not swing into positive territory. Analysts say that the outcome of the upcoming meeting of cabinet ministers as they discuss the way forward in the Brexit negotiations is weighing heavily on the Pound as are concerns that the current Prime Minister, Theresa May, might not hammer out an agreement with the European Union before the UK is compelled to withdraw.
As reported at 11:23 am (BST) in London, the GBP/USD was trading lower at $1.3157, down 0.37%; the pair had earlier hit a session low of $1.3145 while the peak is at $1.3209. The Pound is also lower against the common currency Euro with the EUR/GBP pair trading higher at 0.88479 Pence, up 0.01% and off the session peak of 0.88650 Pence; the low for the trading session is at 0.88310 Pence.
BoE Outlook Weighs
The shift in sentiment for a rate hike from the Bank of England is also playing its part, resulting in the downtrending British currency. Last week, several UK-based corporations voiced their collective concerns over the lack of a Brexit deal and the possible impact it might have on the UK economy. That, in turn, has led to analysts noting that there is now a higher likelihood that the UK central bank will now simply maintain the status quo as regards an interest rate adjustment. The Bank of England's Governor Carney will be making a speech on Thursday which will, no doubt, be scrutinized by investors.