Pound Erases Decline After Manufacturing Data Beats Expectations
(Bloomberg) -- The pound erased a decline after data showed that U.K. manufacturing grew by more than economists expected in August.
Sterling climbed versus all of its Group-of-10 peers after the IHS Markit’s factory Purchasing Managers Index rose to 56.9 from 55.3 in July. That’s above the key 50 level that divides expansion from contraction and above the median economist forecast for a reading of 55.
The pound has lost more than 13 percent of its value against the dollar since the Brexit vote in June last year as investors fret how the $2.6 trillion economy will fare once the U.K. exits the European Union. Prime Minister Theresa May’s government has also made little progress in Brexit negotiations with the EU, with the latest round of talks ending in acrimony, adding to investor concerns.
Friday’s U.K. factory data “may give the pound support in the short term, particularly as concerns regarding the impact of Brexit uncertainty on the real economy have started to increase,” Thu Lan Nguyen, a Frankfurt-based analyst at Commerzbank AG, said in emailed comments. “The positive data is alleviating this concern somewhat.”
Sterling was little changed against the dollar and touched $1.2934 soon after the report. It had earlier fallen as much as 0.2 percent.