Currency News: Pound Drops as Manufacturing Slows
Currency News
In Currency News, the pound has dropped against the dollar as U.K manufacturing growth declines.
Financial data company, IHS Markit, says its Purchasing Managers Index (PMI) for the sector suggested manufacturing decline in the first three months of the year. PMI is an indicator of the economic health of the manufacturing sector. March’s manufacturing PMI declined to 54.2 from 54.5 in February.
As we can see in the chart below, the GBP/USD fell by 0.41% to 1.2492.
(Source: Bloomberg)
Since Great Britain’s vote to leave the E.U. in June 2016, the Pound Sterling has decreased by approx. 20%.
As Britain begins its process of leaving the E.U., the Sterling Pound could potentially decline even further as it has since the country voted to leave. With purchasing power decreasing, perhaps this could increase exports as other currencies will have a stronger buying power against the Pound Sterling.
“The U.K. economy is still doing relatively well, though there’s still fears we could see a sharper slowdown. But it’s not something we’re anticipating” Lee Hardman, currency strategist at MUFG.
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