The Pound Sterling to Hong Kong Dollar (GBP/HKD) exchange rate was trending lower in Wednesday’s European trading while the Pound Sterling to Indian Rupee (GBP/INR) and Pound Sterling to Russian Ruble (GBP/RUB) exchange rates were both able to trend higher.
The Pound Sterling (GBP) dropped against a host of other majors on Wednesday after the UK Services Purchasing Managers Index (PMI) declined from 59.5 to 56.5 in May rather than the 59.2 forecast.
Hong Kong Manufacturing Declines in May – HKD Exchange Rate Falls against Majors
Meanwhile, the Hong Kong Dollar was offered little support by way of domestic data when the HSBC Manufacturing Purchasing Managers Index (PMI) slipped from 48.6 to 47.6 in May. Economists had been more optimistic and forecast a rise to 49.8, bordering on expansion territory. Any ecostat residing above the 50.0 benchmark denotes growth whereas below signals contraction.
The May ecostat registered the third consecutive month of contraction with the drop the most significant since late 2011.
Markit economist Annabell Fiddes commented: ‘The downturn in Hong Kong’s private sector intensified in May, with output falling at the quickest rate in three-and-a-half years amid a faster contraction of new orders. Furthermore, new business from Mainland China fell at the quickest rate since December 2008.’
‘Overall, the data suggest that Hong Kong’s economy may struggle to recover any growth momentum in the near-term, as companies continued to shed staff and reduced their input buying in response to weaker demand conditions.’
Russian Services Remain in Growth Territory, Ruble (RUB) Weakens on Oil Concerns
The Russian economy printed some positive data on Wednesday in the form of the HSBC Services PMI. The ecostat managed to clamber higher into expansion territory, rising from 50.7 to 52.8 in May, while economists had expected a softer 49.02.
However, the Ruble (RUB) weakened significantly against other majors as oil declines weighed on the Russian currency. Oil prices are likely to fluctuate significantly ahead of Friday’s Organisation of Petroleum Exporting Countries (OPEC) meeting, which will see the institution discuss output levels.
Indian Rupee (INR) Exchange Rate Falls after Services PMI Takes a Tumble
Meanwhile, the Rupee (INR) dropped against other currency peers after the Indian HSBC Services PMI registered a fall from 52.4 to 49.6 in May, rather than the 52.1 forecast. The contraction was the first one recorded in the past 13 months.
Markit economist Pollyanna De Lima stated: ‘The sector is expected to see a rebound in the coming months. An upturn in employment combined with improved business confidence further add to evidence that prospects may brighten.’
The Reserve Bank of India (RBA) also cut interest rates by 25 basis points this week, to 7.25%
The Pound Sterling to Honk Kong Dollar (GBP/HKD) exchange rate is trending at 11.8560. The Pound Sterling to Russian Ruble (GBP/RUB) exchange rate is trending in the region of 81.7100. The Pound Sterling to Indian Rupee (GBP/INR) exchange rate is trending in the vicinity of 97.7680.