industry

Pound US dollar exchange rate: GBP slips as ‘Brexit blight’ wracks UK manufacturing


Sterling fell against the US dollar after the publication of the UK manufacturing PMI figures for January fell below-expectation to 52.8 – its weakest performance since July 2016. Duncan Brock, a director at the Chartered Institute of Procurement and Supply, said: “Brexit blight strikes again… and optimism withers away under the weight of uncertainty as the UK teeters on the edge of departure from the EU.” Meanwhile in other Brexit news, Prime Minister Theresa May has come under increasing pressure as the UK and EU continues to remain in deadlock over re-negotiations on the Irish backstop.

It comes following the EU’s warning that it is unwilling to concede on the issue.

These were also following reports that there would be a £39 billion ‘divorce bill’ demanded by the EU, which has inevitably dampened market sentiment in Sterling.

Pound investors were left feeling nervous after an Institute of Directors (IoD) survey indicated that 29 per cent – out of 1,200 members – either felt their business was at threat because of Brexit, or were planning to move their operations abroad as a safety measure.

Edwin Morgan, Director General at IoD, said: “We can no more ignore the real consequences of delay and confusion than business leaders can ignore the hard choices that they face in protecting their companies…

“[The] unavoidable disruption and increased trade barriers that no deal would bring are entirely unproductive.”

US dollar investors, meanwhile, will be looking ahead to today’s raft of important ecostats, with the most notable release being the US non-farm payrolls figures for January, which are expected to decrease.

These will be followed by the yearly US average hourly earnings figures for January which are expected to remain static a 3.2 per cent.

Later on today, meanwhile, will see the publication of the US ISM manufacturing PMI figures for January, which, too, are expected to decrease, potentially weakening the exchange rate.

Today also saw reports that the ongoing US-China trade talks had made “tremendous progress”, according to US President Donald Trump.

Mr Trump, however, also added: “That doesn’t mean you’re going to have a deal but there’s a tremendous relationship and a warm feeling.”

The Chinese news agency, Xinhua, reported that China had agreed to increase its import of US energy and agricultural products, along with services and manufacturing goods, buoying market confidence in the ‘Greenback’.



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