The manufacturing sector in Britain is growing at an accelerated pace. The manufacturing PMI is up to 58.2 points, significantly better than expected. It is joined by an upwards revision for the previous figure: from 56.3 to 56.6 now. The manufacturing sector enjoys a weaker pound: British exports are more attractive.
GBP/USD is recapturing the 1.35 it slipped below just before the news broke out. Update: the pair struggles to hold onto the 1.35 level, but is off the lows of 1.3478.
Markit’s purchasing managers’ index (PMI) for the manufacturing sector was expected to edge up from 56.3 to 56.5. These levels reflect solid growth, well above the 50-point threshold that separates expansion and contraction. This is the first out of three PMIs. Monday will see the construction PMI and Tuesday the services PMI, which is the most important one.
GBP/USD was trading just under 1.35 ahead of the publication. Support awaits only at 1.3340.
Sterling has been a star in recent days thanks to hopes for a big Brexit breakthrough. Reports about a deal on the Irish border seem to have come too early. First, there is no clarity that an agreement has been reached. Dublin says the negotiations are ongoing. In addition, the Northern Irish DUP party has threatened to bring down May’s government.
More: Brexit: Irish border is far from a done deal – will GBP fall?