Pound Falls As UK Services PMI Falls Sharply
05 Aprile 2018 - 07:39AM
RTTF2
The pound declined against its major opponents in the early
European session on Thursday, after a data showed that the UK
service sector expanded at the weakest pace since July 2016 due to
bad weather.
Survey data from IHS Markit showed that the IHS Markit/Chartered
Institute of Procurement & Supply Purchasing Managers' Index
fell more-than-expected to 51.7 in March from 54.5 in February.
The score was forecast to drop to 54.0.
Meanwhile, European shares rose on easing trade war fears, after
the United States expressed willingness to negotiate a resolution
to an escalating trade conflict with China.
White House economic advisor Larry Kudlow defended President
Donald Trump's proposed tariffs on Chinese goods, saying such an
approach could be a tactic to get China to negotiate on trade
practices.
The currency traded mixed against its major rivals in the Asian
session. While the pound held steady against the euro and the
franc, it rose against the yen. Against the greenback, it
dropped.
The pound dropped to 0.8738 against the euro, after having
advanced to 0.8716 at 3:30 am ET. On the downside, 0.90 is seen as
the next support level for the pound.
Data from Destatis showed that Germany's factory orders
recovered in February but the pace of expansion was much weaker
than expected.
Factory orders rose 0.3 percent month-on-month in February,
reversing a revised 3.5 percent decrease seen in January.
Economists had forecast a 1.5 percent rise.
The pound slipped to 1.4033 against the greenback and 1.3496
against the franc, off its early session's high of 1.4097 and near
a 2-year high 1.3538, respectively. The pound is likely to find
support around 1.38 against the greenback and 1.33 against the
franc.
Reversing from an early 1-1/2-month high of 150.69 against the
Japanese yen, the pound eased to 150.25. The pound is seen finding
support around the 148.00 region.
Looking ahead, Canadian and U.S. trade data for February and
U.S. weekly jobless claims for the week ended March 31 are
scheduled for release in the New York session.
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