Forex News – Sterling steady despite weaker UK manufacturing growth in August
October 1, 2013 9:04 am
The British pound dipped briefly in a knee jerk reaction after some weak UK manufacturing sector data showing the industry growth slowed slightly in September from a two-year high the month before, driven lower by a slowdown in export orders.
A report released by the Markit/CIPS showed the UK Purchasing Managers’ Index (PMI) dropped to 56.7 from August’s 57.1, a slightly weaker reading than the expected rise to 57.3.
The bright side is that the employment sub-index rose to 54.0 from 51.9, showing employment and prices rose at their fastest pace in two years, suggesting limited spare capacity in the sector.
Data also pointed to solid growth in manufacturing, which makes up 10 percent of Britain’s economy, and showed that factories are hiring at the fastest rate since May 2011.
“These numbers are encouraging in respect to the rebalancing of the economy, with goods production likely to provide a major stimulus to economic growth in the third quarter,” said Rob Dobson, senior economist at survey compilers Markit.
GBPUSD dipped 20 pips to $1.6209 after the data before bouncing back to pre-data levels and stabilizing around $1.6224.
The British pound dipped briefly in a knee jerk reaction after some weak UK manufacturing sector data showing the industry growth slowed slightly in September from a two-year high the month before, driven lower by a slowdown in export orders.
A report released by the Markit/CIPS showed the UK Purchasing Managers’ Index (PMI) dropped to 56.7 from August’s 57.1, a slightly weaker reading than the expected rise to 57.3.
The bright side is that the employment sub-index rose to 54.0 from 51.9, showing employment and prices rose at their fastest pace in two years, suggesting limited spare capacity in the sector.
Data also pointed to solid growth in manufacturing, which makes up 10 percent of Britain’s economy, and showed that factories are hiring at the fastest rate since May 2011.
“These numbers are encouraging in respect to the rebalancing of the economy, with goods production likely to provide a major stimulus to economic growth in the third quarter,” said Rob Dobson, senior economist at survey compilers Markit.
GBPUSD dipped 20 pips to $1.6209 after the data before bouncing back to pre-data levels and stabilizing around $1.6224.
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