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GBP/EUR Remains Higher, GBP/AUD Jumps, UK Manufacturing Disappoints

01 February 2018 by News Desk

The pound's had an interesting week with some ups and downs, but Thursday morning saw it recover against the euro (GBP/EUR) and Australian dollar (GBP/AUD), say currency experts FC Exchange.

The pound continued to bounce back early in Thursday’s European trading, residing around 0.30% higher against the euro in the region of 1.1470. However, as the session continued and economic data hit the market, the pound eased back slightly.

British economic data showed the UK’s manufacturing sector had slipped in January, with Markit’s latest index coming in at 55.3, after December’s 56.3 (which has been revised lower to 56.2). Growth in the sector slowed to a seven-month low, yet still remained above its long-term average. Economists had expected a more robust 56.5.

IHS Markit Director Rob Dobson commented: ‘Encouragingly, despite the slowdown, the latest survey is consistent with production rising at a solid quarterly rate of around 0.6% in January, with jobs also being added at a faster pace. However, output growth has slowed sharply since last November’s high, and the more forward-looking new orders index has slipped to a seven-month low. The trend in demand will need to strengthen in the near-term to prevent further growth momentum being lost in the coming months.’

Any figure above the 50.0 mark denotes expansion in the sector, whereas a number below shows contraction. Meanwhile, today also saw the Eurozone’s own manufacturing index confirmed at 59.6 in January. UK construction data will be out in tomorrow’s session.

Meanwhile, the pound managed to advance rapidly against the Australian dollar (GBP/AUD), climbing by around 0.90%. Riskier assets were less favoured in the market this week as volatility increased, causing the Australian dollar to fall. Additionally undermining the Aussie currency was a softer-than-forecast inflation reading. Weaker inflation eased any pressure on the Reserve Bank of Australia (RBA) to hike interest rates in the near future. Consumer prices reside at 1.9% according to the fourth quarter year-on-year reading, up from 1.8%, but below the 2.0% prediction.

The pound to euro (GBP/EUR) exchange rate is currently trending in the region of 1.1444.The pound to Australian dollar (GBP/AUD) exchange rate resides at 1.7771.

Disclaimer: This economic update is provided by FC Exchange a Global Reach Group Company, industry leaders in foreign exchange. Authorised affiliates are permitted to reuse content.

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