Pound Strengthens On Better-than-expected U.K. PMI

Pound Strengthens On Better-than-expected U.K. PMI


In the early European on Monday, the pound spiked up against other major currencies after a report showed that the country's manufacturing PMI rose more than expected in August.
Survey results from Markit Economics showed that the downturn in the U.K. manufacturing sector showed signs of easing in August.
The Markit/Chartered Institute of Purchasing & Supply Purchasing Manager's Index rose more than expected to 49.5 from 45.2 in July. Economists had forecast the index to rise to 46.3.
"The marked easing in the rate of contraction at UK manufacturers is heartening, if only because last month's steep pace of decline wasn't repeated," Rob Dobson, senior economist at Markit said.
The pound hit 0.7909 against the euro for the first time since August 30. The next resistance level for the pound is seen at 0.787. At last week's close, the pair was worth 0.7929.
Eurozone's manufacturing sector continued to contract in August, but a slower pace than in July, the detailed survey results from Markit Economics confirmed. However, the improvement was slightly weaker than estimated in the flash report.
The purchasing managers' index, that measures the activity in the factory sector, rose to 45.1 in August from 44 in July. The revised reading was below the flash score of 45.3.
Against the franc, the pound that closed last week's deals at 1.5153 approached 1.5192, its highest level since August 30. On the upside, the pound may target 1.525 level.
An indicator of Swiss manufacturing sector performance declined unexpectedly in August, pointing to further deterioration in business conditions during the month, a survey revealed.
The procure.ch /SVME purchasing managers' index fell to 46.7 from 48.6 in July. Economists had forecast an increase to 49.4.
The British currency that erased its early Asian session's decline against the yen gained thereafter. The pound rose to 124.59 against the yen at 4:30 am ET from an early low of 123.98. If the pound advances further, it may target 125.00 level. The pound-yen pair closed last week's trading at 124.24.
Against the U.S. dollar, the pound that fell to 1.5852 in Asian morning deals bounced back and held steady thereafter. But the pound advanced to an 11-day high of 1.5901 amid the report with 1.595 seen as the next upside target level. The pound-greenback pair was quoted at 1.5876 at yesterday's close.
U.S. markets are closed today for Labour day.


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