Pound Lower After PMI Disappointment
The specter of a disorderly Brexit with no deal on the table is once again looming large over the Pound Sterling. That has led the Prime Minister to attempt to over the Parliamentary stalemate by meeting with both parties to work out a compromise. Parliament will be putting the newest amendments to a vote in mid-February. In the month of January, the Pound had been able to push higher but is in danger of losing much of its gains, unless an agreement can be reached before the March 29th deadline. Elevated interest in derivatives markets is a strong indication that there is growing concern, once again, that Britain will leave the EU without a deal.
As reported at 11:36 am (GMT) in London, the GBP/USD was trading lower at $1.3060, down 0.15% and off the session trough of $1.3044. The EUR/GBP was trading higher at 0.8764 Pence, a gain of 0.06%; the pair has ranged from a low of 0.87410 Pence to a peak of 0.87722 Pence.
Outlook for BoE Shifting
The release of disappointing PMI data out of the UK didn't help the currency either. According to the UK's National Statistics Office, the PMI Construction reading for January fell to 50.6, well below the 52.4 that analysts had predicted and below the previous reading of 52.8. That news follows Friday's Manufacturing Sector PMI which also failed to meet expectations with a reading of 52.8 in January, below the consensus estimate of 53.5. Growing concerns over growth of the UK economy have dampened support for a more dovish outlook from the Bank of England, with the likelihood of a rate increase now dropping to 55% from 62% only a week ago. The central bank's Monetary Policy Committee meets later this week.