Foreign Exchange Daily Market Update 02/08/2016

Tue, August 02, 2016

Pound Falls After Manufacturing Data

Sterling fell against the majority of its 16 major peers as the data showed U.K. manufacturing declined more than expected in July. Anything above 50 shows growth for that month. Economists predicted the outcome to be 49.1 however the data come out as 48.2, therefore causing the Pound to weaken even more.

The Pound has fallen 11% against the Dollar since the U.K voted to leave the EU on 23^rd June and posted its third consecutive monthly drop against the Dollar in July.

All but two of 51 economists in a survey expect the BOE to cut interest rates to 0.25% on Thursday. It has been at the record low of 0.5% since March 2009. The BOE are expected to maintain its Asset Purchase Target at 375 billion pounds. They is a 98% chance rates will be cut this Thursday in comparison to only 15% on the EU referendum date (23^rd June).

The Pound fell 0.2% to 1.3201 against the Dollar as of 4:04 p.m. Sterling weakened 0.2% to 1.1813 against the Euro.

Data to look out for today.

9:30: GBP UK Construction PMI

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