Pound Falls As U.K. Manufacturing PMI Misses Forecast
03 Agosto 2020 - 09:05AM
RTTF2
The pound dropped against its major counterparts in the European
session on Monday, after the UK manufacturing sector activity
expanded less-than-expected in the month of July.
The Chartered Institute of Procurement & Supply/ IHS Markit
manufacturing Purchasing Managers' Index rose to 53.3 in July from
50.1 in June. The flash reading was 53.6.
New orders expanded for the first time since February, mainly
reflecting a strengthening of domestic demand. But new export
business fell for the ninth straight month, albeit to the weakest
level since February.
European stocks rose after a private gauge of China's
manufacturing activity rose in July to its highest level in more
than nine years.
The upside, however, remained capped amid worries over a further
tightening of restrictions in Europe and a deadlock in the
deliberations over a new stimulus deal in the U.S.
The pound depreciated to 1.3021 against the greenback, setting a
2-day low. The next possible support for the pound is seen around
the 1.25 level.
The pound pared gains to 137.75 against the yen, from a high of
139.03 seen at 8:30 pm ET. The pound is seen finding support around
the 134 region.
The latest survey from Jibun Bank showed that Japan
manufacturing sector continued to contract in July, albeit at a
slower rate, with a manufacturing PMI score of 45.2.
That's up from 40.1 in June, although it remains beneath the
boom-or-bust line of 50 that separates expansion from
contraction.
After rising to a 1-1/2-month high of 1.2035 at 4.30 am ET, the
pound moved off to 1.1953 against the franc. On the downside, 1.15
is possibly seen as the next support level for the pound.
The pound edged down to 0.9013 against the euro from Friday's
closing value of 0.8997. If the pound slides further, it may find
support around the 0.92 level.
Final data from IHS Markit showed that the euro area
manufacturing sector returned to growth in July for the first time
in a year-and-a-half as output and demand continued to recover with
the further easing of restrictions related to the coronavirus
disease.
The manufacturing Purchasing Managers' Index rose to 51.8 in
July from 47.4 in June. This was also above the flash reading of
51.1. Looking ahead, U.S. construction spending for June and ISM
manufacturing index for July will be out in the New York
session.
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