2013-03-01 11:44:19 Forex News – Sterling tumbles on weak manufacturing data
March 1, 2013 11:44 am
Sterling tumbled to a fresh 2-1/2 year low against the dollar on Friday after investors sold off the currency in reaction to disappointing news that the UK manufacturing sector contracted in February despite forecast for an increase.
Data from Markit/CIPS Manufacturing Purchasing Managers’ Index (PMI) showed a drop to 47.9 from a downwardly revised 50.5 in January, which surprised markets as consensus was for a rise to 51.00. The 50 point level demarcates expansion from contraction.
The data was a blow to investor confidence in the pound, which has already been hit by speculation that the Bank of England may be expanding monetary easing measures and could likely adopt more bond purchases to stimulate the sluggish economy. This type of policy usually weakens a currency.
Fears of the UK economy dipping back into a recession spooked investors who sold off the pound, pushing it down against the dollar to $1.5011, its lowest since July 2010 and is down 1 percent on the day.
Sterling tumbled to a fresh 2-1/2 year low against the dollar on Friday after investors sold off the currency in reaction to disappointing news that the UK manufacturing sector contracted in February despite forecast for an increase.
Data from Markit/CIPS Manufacturing Purchasing Managers’ Index (PMI) showed a drop to 47.9 from a downwardly revised 50.5 in January, which surprised markets as consensus was for a rise to 51.00. The 50 point level demarcates expansion from contraction.
The data was a blow to investor confidence in the pound, which has already been hit by speculation that the Bank of England may be expanding monetary easing measures and could likely adopt more bond purchases to stimulate the sluggish economy. This type of policy usually weakens a currency.
Fears of the UK economy dipping back into a recession spooked investors who sold off the pound, pushing it down against the dollar to $1.5011, its lowest since July 2010 and is down 1 percent on the day.
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