Good Manufacturing PMI Unable to Prevent Sterling from Falling

The Great Britain pound fell today despite the manufacturing data that was above expectations. Traders were still concerned that the United Kingdom and the European Union may not reach a Brexit deal before the UK officially severs ties with the EU.

The seasonally adjusted IHS Markit/CIPS UK Manufacturing Purchasing Managers’ Index rose a bit to 54.4 in June from 54.3 in May (revised negatively from the original reading of 54.4). That is instead of falling to 54.1 as analysts had predicted. The better-than-expected data fueled speculations that the Bank of England may raise interest rates in August. Yet looking into the details of the report, things did not look that good, and comments of the Markit staff in the report sounded rather pessimistic.

GBP/USD dropped from 1.3204 to 1.3110 as of 13:54 GMT today. EUR/GBP rose from 0.8844 to 0.8853.

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