British Pound (GBP) Exchange Rate Weakens after Disappointing PMI Data
The British Pound fell against the majority of its most traded peers on Tuesday after data showed that UK manufacturing grew at a slower pace than economists had forecast as export demand tumbled to its lowest level in 10 months as concerns from Asia and Ukraine weigh.
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According to the data released by market research group Markit its manufacturing PMI slipped to a seasonally adjusted level of 55.3 in March, down from the strong figure of 56.2 recorded in February. The data disappointed economists as most had been forecasting a rise to 56.7.
Any figure above 50 indicates expansion whereas one below indicates contraction.
Sterling slipped against the Euro after the data out of the single currency region suggested that the region’s economic recovery is becoming more balanced and effective. France saw its manufacturing PMI leap to a 33-month high and Italy and Spain both saw improvements.
Unemployment across the Eurozone also dropped slightly causing investors to raise their hopes that the unemployment crisis is starting to see something of a turnaround. The overall jobless rate fell to 11.9%. Germany saw unemployment fall but Italy saw its jobless rate climb to a new record high. France and the Netherlands also saw rises in the number of citizens out of work.
The next data release for the British Pound comes on Thursday with the latest services PMI due for publication. If the Pound Sterling exchange rate is to recover ground, the report will have to come in strongly.