Pound Retreats Against Most Majors After U.K. PMI Data

06:20, 1st September 2014

(RTTNews) - The pound given back some of its early gains against most major currencies in European deals on Monday, as the manufacturing growth in the U.K. slowed to a 14-month low in August.

British manufacturing growth eased further in August to its lowest level in 14 months as output and demand increased at slower rates, survey results from Markit Economics showed.

The Markit/CIPS Purchasing Managers' Index dropped to 52.5 from a revised 54.8 in July. Economists had expected the score to fall to 55.1 from July's original figure of 55.4. The latest PMI reading was the lowest since June last year.

U.K. mortgage approvals declined in July after recording a strong increase in June, data published by the Bank of England showed.

The number of mortgages approved in July totaled 66,569 compared to 67,085 in June. It was forecast to fall to 66,000.

Traders focus on the Bank of England's monetary policy meeting due later in the week, at which the interest rate is seen keeping at historic low of 0.50 percent. This comes after last month's BoE minutes showed dissent among MPC members regarding the interest rate hike, given improvement in economic growth.

The pound eased to 1.5253 against the Swiss franc, reversing from early near 3-week high of 1.5285. At last week's close, the pair was valued at 1.5235. The pound is likely to face support around the 1.515 region.

Switzerland's manufacturing activity continued to expand in August, but the pace of growth eased to the lowest since May, data from Credit Suisse showed.

The procure.ch Purchasing Managers' Index fell to 52.9 in August, the lowest since May, from 54.3 in July.

The pound, having risen to a 12-day high of 1.6643 against the dollar earlier, eased back to 1.6612 when the data came out. An extension of bearish trend may lead the pound to a support around the 1.65 area.

After advancing to near a 6-week high of 0.7891 against the euro in early deals, the pound reversed direction with pair trading around 0.7908. Next key downside target for the pound may be seen around the 0.795 region.

Eurozone manufacturing sector growth eased to its lowest level in the current 14-month growth sequence in August, final data from Markit Economics showed.

The final manufacturing Purchasing Managers' Index fell to 50.7 in August from 51.8 in July. It was the lowest score since July last year and was below its earlier estimate of 50.8.

Meanwhile, the pound remained firm against its Japanese counterpart, hovering around a 4-week high of 173.34. The pair was worth 172.68 at Friday's close.