Foreign Exchange Daily Market Update 02/09/2016

Fri, September 02, 2016

Pound Continues To Strengthen After Manufacturing Data

U.K. manufacturing reached a 10-month high in August due to a weaker pound boosting exports. Exports have risen quite considerably since Brexit due to the cheap goods for exporters.

UK Manufacturing PMI, which dropped below the key 50 level in July, surged to a record of 53.3. This data was expected to come out at a reading of 49 causing Sterling to surge to 1.33 and 1.19 levels against the Dollar and the Euro

Concern that output would slow has already prompted the BOE to cut its key interest rate to a record low 0.25% and restart its asset-purchase program, and officials have said more easing may be needed if the economy performs in line with their expectations.

That’s caused investors to lower the odds on another rate cut by the BOE’s December meeting. They now see a 27% chance that the Monetary Policy Committee will lower the benchmark from 0.25%, down from almost 40% following the August decision.

The Pound rose after the factory report was published to reach 1.3249 against the Dollar before further progressing to a high of 1.3307, up 0.8% on the day. Sterling has fallen more than 10% against the dollar since the Brexit vote. The Pound also advanced against the Euro to 1.1876 with a high of 1.1904.

Data to look out for today.

09:30: GBP UK Construction PMI

13:30: USD Change In Non-Farm Payrolls

13:30: USD Unemployment Rate

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PRESS RELEASE

KBRFX was mentioned in the Essex Chronicle for the top 100 companies by turnover in Essex http://www.essexchronicle.co.uk/100-Essex-businesses-revealed-annual-survey/story-25140555-detail/story.html

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