The Pound Sterling fell against the US Dollar after today’s release of PMI figures on the construction sector showed unexpected slowing in September. According to the data, the PMI reading fell to 48.1, against expectations of a decline to 50.1; the August reading was at 51.1. For reference, any reading below the 50.0 threshold signals a contraction in the sector; historically, the September reading is a 14-month low and the sharpest drop since the June 2016 Brexit vote. Only a week ago, there was some optimism for the Pound after the Bank of England signaled consideration for a rate increase, but concerns over the British economy have weighed on the Pound.
As reported at 11:20 am (BST) in London, the GBP/USD was trading at $1.3258, down 0.14%; the pair earlier hit a trough of $1.3228 while the session peak is at $1.3288. The EUR/GBP was trading at 0.8869 Pence, a gain of 0.35%; the pair has ranged from 0.88208 Pence to 0.88713 Pence in today’s session.
Services Sector PMI Eyed
Markit’s PMI survey of Britain’s services’ sector will be released tomorrow and analysts are forecasting that September’s figures will remain unchanged at 53.2. Analysts say that only the emergence of a clearer weakening pattern within the economy will push the Pound dramatically lower. However, in the interim, political uncertainty will continue to weigh, with some concerns about Theresa May’s future as the Prime Minister with two possible contenders for the job, namely Boris Johnson and Amber Rudd.