* Figures in the table reflect revisions, while graph shows the original data. The readings in the table are for the month the release is measuring.
May 3rd – In the UK, weaker manufacturing data was a major catalyst for GBP weakness.
From the Telegraph: “The Markit/CIPS manufacturing PMI headline index, published on Tuesday, fell to 54.6 in April, its lowest since September, from a downwardly revised 56.7 in March and well below the 56.9 consensus forecast in a Reuters poll. Figures above 50 show expansion.
Although the output prices index eased to 64.2 in April from a record 65.2 in March, the inflation rate was still the third highest since the data were first collected in 1999.
The figures underscore the Bank of England’s plight as it struggles to tame inflation running at double its 2 percent target, while trying to protect Britain’s fragile recovery.”
The manufacturing sector makes up about 13% of UK GDP, and has been a strong performer on the back on good demand from abroad and a relatively cheaper Pound. But, the domestic market has weakened in considerable months, which could mean a deteriorating outlook for manufacturing in the months to come. Therefore the sector will have to rely more and more on exports to drive growth.
The GBP/USD fell though support at 1.6630 at the start of the global session, but saw its steepest drop in the wake of the manufacturing data which sent the pair to a low of 1.6470 low as we head into the NY session.