Pound Retreats As U.K. Manufacturing Sector Growth Eases To 2-yr Low
July 01 2015 - 05:27AM
RTTF2
The pound came off from its early highs against the other major
currencies in early European deals on Wednesday, after data showed
that U.K. manufacturing growth unexpectedly eased to its weakest in
26 months in June due to moderation of growth in production and new
orders.
Survey data from Markit Economics showed that the seasonally
adjusted Markit/CIPS Purchasing Manager's Index dropped to 51.4 in
June from 51.9 in May, which was revised from 52. Economists had
expected an improvement in the index to 52.5. A PMI reading above
50 suggests expansion in the sector.
The survey also showed that manufacturing growth in the second
quarter, on average, was the weakest since the first three months
of 2013.
Meanwhile, the European markets rose, even as Greece missed EUR
1.6 billion repayment owed to the IMF on Tuesday, putting Greece at
risk of leaving the euro.
The pound was trading higher against most major rivals in the
Asian session.
The pound was trading at 0.7085 against the euro, coming off
from early an 2-day high of 0.7059. The next possible support for
the pound is located around the 0.72 area.
The final data from Markit showed that the euro area
manufacturing sector expanded as initially estimated in June.
The Purchasing Managers' Index rose to 52.5 in June from 52.2 in
May. The reading came in line with flash estimate published on June
23. It was the highest reading since April 2014.
The pound dropped to 1.5646 against the greenback, its weakest
since June 17. This may be compared to Tuesday's closing value of
1.5712. Continuation of the pound's downtrend may lead it to a
support around the 1.55 mark.
The pound reversed from an early high of 192.94 against the yen,
with the pair trading lower at 191.99. The pound may possibly find
support around the 189.00 mark.
The pound eased back from an early 2-day high of 1.4793 against
the franc, trading at 1.4688. At Tuesday's close, the pair was
valued at 1.4684. If the pound continues slide, 1.45 is likely seen
as its next support level.
Looking ahead, the Bank of England will publish the financial
stability report followed by Governor Mark Carney's news
conference, in London at 5:30 am ET.
In the New York session, U.S. manufacturing PMI reports for
June, U.S. construction spending for May and weekly U.S. oil
inventories report are slated for release.
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