This Pound Sterling forecast discusses factors that could impact GBP exchange rates this week.
After a fairly positive month during April for Sterling exchange rates the Pound has seen a negative start. In recent weeks it appears as though the Remain camp is gaining more momentum than the Leave campaign, which has helped to support the Pound but in the last two trading sessions Sterling has begun to fall.
According to the Markit Purchasing Manager’s Index UK manufacturing activity fell in April for the first time since 2013 causing concern for the British economy. The reading fell to 49.2 from 50.7 in March and anything below 50 represents a contraction. With the uncertainty of what may happen when the UK votes in the EU referendum this has caused less domestic demand and a drop in new business orders from overseas.
Last week UK GDP figures for the first quarter showed a fall from 0.6% from the final quarter of last year to 0.4%. This economic data is clearly concerning for the UK and does not bode well for the short term future of the British economy and arguably Sterling.
The survey also showed that employment in the manufacturing sector is down and with the UK’s jobs market having been relatively healthy during the last few months this could cause uncertainty for Sterling.
We start this morning with PMI Construction data at 9:30am with the expectation for 54 for April. With manufacturing data so poor yesterday I would not be surprised to see more of the same leading to losses for Sterling against both the Euro and the US Dollar.
There is little economic data due for release this week so the Pound is likely to be affected by what happens elsewhere and for me I think this could be a difficult week for the Pound.
For more news on how upcoming data releases could affect Pound Sterling exchange rates call our currency brokers on 0044 1494 725 353 or email me here.
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