Pound Sterling continues its upward trend following further positive economic data. You can view our live exchange rates page for real time changes.
The key news out of the UK yesterday was the early morning release of PMI Services data, which came out better than expected continuing the trend of the UK economy performing well since the Brexit vote.
PMI stands for purchasing managers index and the news release is one of the most influential economic indicators offering a reading of an economy. It shows how business executives see the status of sales, employment and the business outlook moving forward. The figures usually come out either side of 50, with readings below 50 demonstrating a decline and figures above 50 indicating growth.
Yesterday morning’s reading is significant because the previous figure was 47.4, and analysts were expecting a figure of 49.9 yet the figure released comfortably exceeded these expectations and came out at 52.9. This was the biggest month on month rise in the surveys history, and as you would imagine the positive data boosted the Pound’s value with the currency gaining across the board.
Yesterday’s noteworthy reading was for July, making it even more significant as it’s a reflection of the UK’s economic performance in its new, post-brexit-vote environment. When we consider how the Bremainers used economic performance as a tool to warn voters against voting for a ‘Brexit’, these readings make for interesting reading as although their predictions could still come to fruition, so far they’re certainly not.
Short term recession fears are fading after the UK’s Manufacturing (best monthly performance in 25 years) and Construction PMI readings beat expectations along with yesterday’s Services figure, with the latter being the most important as the services sector accounts for 80% of the UK economy.
It’s not all good news for optimistic Brexiters and Sterling bulls though, as over the weekend there were a few headlines which could scupper the Pounds recent gains and I think anyone with a currency requirement involving selling sterling should be aware of them.
Japan released a 15 page report warning that many of its companies may relocate to Europe if need be. US president Obama has informed Theresa May that the UK won’t be prioritised on trade deals, although Mr Trump has previously suggested otherwise. These announcements are likely to dampen sentiment towards Sterling, and when we consider that the Bank of England has previously suggested it may cut interest rates further, there is potential for another Sterling slide. Also in other Brexit related news, late yesterday Theresa May ruled out a Aussie points based immigration policy.
Thursday will see the release of Industrial Production Figures on an annual basis and an increase to 1.8% is expected. If you would like to discuss or plan an upcoming currency requirement, feel free to get in touch with one of our experienced members of the team.
Pound Sterling could be under pressure following comments from Japanese officials and Barack Obama, if you are buying foreign currency in the near future why not speak to our team on 01494 725 353. We may be able to assist you with making an informed decision on a currency transfer.
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