Forex News – Sterling falls as UK manufacturing continues to contract
April 2, 2013 10:10 am
Sterling held firm ahead of the UK manufacturing Purchasing Managers’ Index (PMI) data, but began falling just before the release that was due at 0828 GMT. Markets expected the manufacturing sector contracted further in March, as based on forecasts.
In fact, according to a report by Markit/CIPS, the PMI fell more-than-expected to 48.3 versus 48.9 forecast, though slightly better than February’s shocking 47.9 points.
The March number is still in contraction territory, as the 50-point level demarcates growth from contraction.
GBPUSD fell to as low as $1.5205 within a half hour of the data, down from a pre-data high of $1.5232.
Rob Dobson from Markit said the following comments:
“March PMI data indicate that the UK manufacturing sector contracted again during the opening quarter of 2013, to remain a drag on the broader economy. These weak numbers may be sufficient to tip the balance and convince more members of the MPC to consider additional QE at their meeting next week.”
“The onus is now on the far larger service sector to prevent the UK from slipping into a triple-dip recession. The ongoing weakness of manufacturing and the hard to estimate impact of bad weather on first quarter growth suggest that this is still touch-and-go and that any expansion will be disappointing nonetheless.”
“Manufacturers are still feeling the impact of subdued demand in domestic and export markets, as consumers and businesses rein in spending and the Eurozone remains in what seems to be a perpetual cycle of crisis. Cost-caution is also leading to manufacturing job losses, destocking of inventories and a reluctance to invest, all of which will exert a drag on the broader economy in coming months.”
Sterling held firm ahead of the UK manufacturing Purchasing Managers’ Index (PMI) data, but began falling just before the release that was due at 0828 GMT. Markets expected the manufacturing sector contracted further in March, as based on forecasts.
In fact, according to a report by Markit/CIPS, the PMI fell more-than-expected to 48.3 versus 48.9 forecast, though slightly better than February’s shocking 47.9 points.
The March number is still in contraction territory, as the 50-point level demarcates growth from contraction.
GBPUSD fell to as low as $1.5205 within a half hour of the data, down from a pre-data high of $1.5232.
Rob Dobson from Markit said the following comments:
“March PMI data indicate that the UK manufacturing sector contracted again during the opening quarter of 2013, to remain a drag on the broader economy. These weak numbers may be sufficient to tip the balance and convince more members of the MPC to consider additional QE at their meeting next week.”
“The onus is now on the far larger service sector to prevent the UK from slipping into a triple-dip recession. The ongoing weakness of manufacturing and the hard to estimate impact of bad weather on first quarter growth suggest that this is still touch-and-go and that any expansion will be disappointing nonetheless.”
“Manufacturers are still feeling the impact of subdued demand in domestic and export markets, as consumers and businesses rein in spending and the Eurozone remains in what seems to be a perpetual cycle of crisis. Cost-caution is also leading to manufacturing job losses, destocking of inventories and a reluctance to invest, all of which will exert a drag on the broader economy in coming months.”
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