Pound Rebounds To $1.23 Post PMI Data, Brexit Proposals Eyed
Fiona Cincotta October 1, 2019 6:58 AM
Pound higher as manufacturing contraction unexpectedly slows
Post manufacturing pmi data, the pound pared early losses which saw it drop to a three-week low versus the dollar.
With Brexit just one month away, the sector benefited from some firms building inventories. However, the vast majority of European customers are eliminating their reliance on UK manufacturing an rerouting their supply chains away from the UK. With no Brexit deal in sight, UK manufacturing sector could be faced with a more challenging climate before any signs of improvement.
Pound traders will turn their attention back to Brexit, with Boris Johnson expected to submit formal proposals to for an alternative to the Irish backstop on Wednesday. Any sign of acceptance from the EU could propel the pound back towards US$1.25.
Dollar traders eye manufacturing data
On the other side of the equation, the dollar stands solid. Whilst recent US data hasn’t been outstanding, it hasn’t been bad either. In short, the US economy has remained resilient amid the ongoing US – Sino trade war. The fact that the Fed are in no rush to cut rates, which central banks across the globe ease policy is also supporting the buck.
Attention now turns to US manufacturing data, which is expected to show that the sector rebounded in September, back into expansion after slipping into contraction in August. A strong reading could lift the dollar higher and pull cable back below $1.23
Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.
Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to Forex.com or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.