Sterling posted significant declines against the US Dollar and Euro as UK growth prospects received another knock.
The Pound Sterling Exchange Rate was in the region of 1.5030 against the US Dollar as of 10:08 am
UK manufacturing contracted in February, giving investors yet another reason to avoid the Pound.
According to Markit, UK manufacturing PMI slid from January’s negatively revised 50.5 to 47.9 – despite economists forecasting an increase to 51.0.
This is the first time in three months that manufacturing PMI has fallen below the 50 level which separates growth from contraction.
The PMI report stated: ‘The UK manufacturing sector lost considerable momentum during February, with output, new orders and employment all posting net reductions since January. Purchasing activity was also cut markedly, as manufacturers continued to signal a preference for lower stock holdings.’
The report continued: ‘New orders fell for a second successive month – and at an accelerated pace. The latest fall was the sharpest since last July amid reports of tough market conditions both at home and abroad. Poor weather was also mentioned as a factor negatively impacting on order book volumes.’
In an accompanying press release, Markit’s chief economist Chris Williamson asserted: ‘ The return to contraction of the manufacturing sector is a big surprise and represents a major setback to hopes that the UK economy can return to growth in the first quarter and may avoid a triple-dip recession. […] a strong rebound is needed in March to prevent the sector from acting as a drag on the economy as a whole in the first quarter […] There are good reasons to believe the PMI may turn up again in March [and] the weaker pound may help exporters in coming months.’
After the PMI report was published the Pound dropped against the US Dollar and Euro, shedding 0.7 against the former and 0.6 per cent against the latter.
Sterling could see additional losses in the hours ahead as investors weigh up what this news means for the UK’s growth prospects.
Earlier today statistics compiled by Nationwide revealed that UK home prices increased slightly in February. The modest 0.2 per cent increase was in line with forecasts.
Current GBP Exchange Rates
The Pound Sterling to Euro (GBP/EUR) exchange rate is currently trading at 1.1528
The Pound Sterling to US Dollar (GBP/USD) exchange rate is currently trading at 1.5030
The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate is currently trading at 1.4730
The Pound Sterling to New Zealand Dollar (GBP/NZD) exchange rate is currently trading at 1.8220
The Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate is currently trading at 1.5504
The Pound Sterling to Japanese Yen (GBP/JPY) exchange rate is currently trading at 139.4600
These exchange rates were correct as of 10:08
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