Pound Falls As U.K. Factory PMI Hits 8-Month Low
March 01 2018 - 2:24AM
RTTF2
The pound slipped against its major opponents in the European
session on Thursday, as British manufacturing sector expanded at
the weakest pace in eight months in February.
Survey data from IHS Markit and the Chartered Institute of
Procurement & Supply showed that the Purchasing Managers'
Index, or PMI, dropped slightly to 55.2 in February from 55.3 in
January. Economists had expected the index to fall to 55.0.
However, any reading above 50 indicates expansion in the
sector.
Further undermining the currency was risk aversion, as investors
became cautious ahead of Federal Reserve chair Jerome Powell's
second congressional testimony later in the day.
His appearance comes two days after House Testimony, where he
advocated the case for aggressive Fed rate hikes amid strong
economic performance.
The currency held steady against its major rivals in the Asian
session, with the exception of the yen.
The pound declined to near a 2-week low of 1.2979 against the
Swiss franc, from a high of 1.3020 seen at 3:15 am ET. The pound is
likely to find support around the 1.27 level.
Data from the State Secretariat for Economic Affairs showed that
Switzerland's economy expanded more than expected at the end of
2017.
Gross domestic product climbed 0.6 percent sequentially in the
fourth quarter.
The pound fell back to 146.56 against the yen, from an early
high of 147.15. This may be compared to near a 6-month low of
146.47 set at 8:15 pm ET. On the downside, 143.00 is seen as the
next support level for the pound.
Survey data from the Cabinet Office showed that Japan's consumer
confidence weakened unexpectedly in February, though slightly.
The seasonally adjusted consumer confidence index dropped to
44.3 in February from 44.7 in January.
Reversing from an early high of 1.3771 against the greenback,
the pound weakened to near a 2-month low of 1.3727. The pound is
seen finding support around the 1.35 mark.
The pound dropped to near a 2-week low of 0.8877 against the
euro and held steady thereafter. The pair was worth 0.8861 when it
closed deals on Wednesday.
Final data from IHS Markit showed that the Eurozone
manufacturing sector continued to expand at a robust pace in
February but the pace of growth slowed from January.
The factory Purchasing Managers' Index fell to a 4-month low of
58.6 from 59.6 in January.
Looking ahead, U.S. jobless claims for the week ended February
24, personal income and spending data for January, ISM
manufacturing index for February and construction spending for
January are set for release in the New York session.
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