Pound Falls On Weak U.K. Manufacturing PMI
May 01 2015 - 5:40AM
RTTF2
The British pound weakened against the other major currencies in
the European session on Friday, after data showed that the British
manufacturing sector growth eased unexpectedly in April.
Data from Markit Economics showed that U.K. Purchasing Mangers'
Index, or PMI, fell to 51.9 in April from 54.0 in March, which was
revised down from 54.4. Economists had expected the index to rise
to 54.6.
In other economic news, data from the Bank of England showed
that U.K. mortgage approvals unexpectedly declined in March, after
rising in the previous three months. U.K. mortgage approvals.
The number of loan approvals for home purchase fell to 61,341
from a six-month high of 61,523 in February. Economists had
expected a higher figure of 62,500. In January, mortgage approvals
were 60,503.
Consumer credit grew by GBP 1.2 billion from the previous month
to GBP 170.2 billion. That exceeded the GBP 0.8 billion increase
forecast by economists.
The report also said that M4 money supply grew 0.3 percent
month-on-month in March following a 0.2 percent fall in February.
On a year-on-year basis, M4 declined 0.6 percent after a 3.2
percent slump in the previous month.
Meanwhile, traders are more cautions ahead of next week's U.K.
general election, as uncertainty prevails.
In the Asian trading, the Pound held steady against its major
rivals.
In the European trading today, the pound fell to more than a
3-week low of 0.7361 against the euro, a 10-day low of 1.4234
against the Swiss franc and a 3-day low of 1.5283 against the U.S.
dollar from early highs of 0.7299, 1.4358 and 1.5396, respectively.
If the pound extends its downtrend, it is likely to find support
around 0.75 against the euro, 1.40 against the franc and 1.48
against the greenback.
Pulling away from an early near a 2-month high of 184.46 against
the yen, the pound edged down to 183.09. On the downside, 180.10 is
seen as the next support level for the pound.
Looking ahead, Canada and U.S. manufacturing PMI for April, U.S.
construction spending data for March and U.S. Reuters/University of
Michigan's final consumer sentiment index for April are due to be
released in the New York session.
At 8:30 am ET, U.S. Federal Reserve Bank of Cleveland President
Loretta Mester will deliver a speech on "Issues in Consumer Credit"
before the Conference on Regulating Consumer Credit in
Philadelphia.
Subsequently, San Francisco Fed President John Williams is
expected to speak on "Monetary Policy in Financial Markets: Is
there a New Paradigm?" before the Chapman University Conference in
Orange, United States at 3:45 pm ET.
Most markets in Asia and Europe are closed in observance of the
Labor Day holiday.
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