A significant slowdown in the UK manufacturing sector according to Markit. The manufacturing PMI drops from 56.3 to 54.3 points in June. A weaker pound helped the small sector. Did the recent strength of Sterling dampen the mood?
GBP/USD extends the drops it had already begun before the release, hitting a new low of 1.2968. Support awaits at 1.29. Was the data leaked?
Markit’s manufacturing purchasing managers’ index was expected to tick down from 56.7 to 56.4 points in June. This is the first PMI out of three, with construction tomorrow and services report on Wednesday.
GBP/USD was trading just under 1.30 ahead of the publication, selling off some of the gains seen last week as the US dollar was recovering.
The gains that the pound enjoyed last week came from Carney: the governor of the BOE suddenly became hawkish on interest rates.
The British press reports about a softer stance from the government on the Brexit talks. The more moderate camp led by Phillip Hammond seems to have the upper hand, at least for now.
The government won a vote of confidence last week and seems quite stable.
