Sterling Climbs After UK Manufacturing Rebounds From Brexit

 01 Sep 2016 - 13:58

Sterling Climbs After UK Manufacturing Rebounds From Brexit
 

London: Sterling jumped 1 percent against the dollar and hit a one-month high against the euro on Thursday after data showing the British manufacturing sector staged one of its sharpest rebounds on record in August.
The Markit/CIPS Purchasing Managers' Index (PMI), a closely watched gauge of factory activity, jumped to a 10-month high of 53.3 in August, recovering from the three-year low it hit in July after Britain's June 23 vote to leave the European Union.
August's headline rise matched the biggest month-on-month increase in the survey's nearly 25-year history, media reports quoted Markit as saying.
That saw the pound grab centre stage. Sterling rose 1 percent to $1.3267, from $1.3152 beforehand while the euro fell to 84.125 pence per euro, down from 84.68 pence before the survey was released.
"The pound is flying after the UK manufacturing PMI for August blew away market expectations," said Craig Erlam, senior market analyst at OANDA. "Not only did the market not expect such a jump, it was barely expecting any improvement at all, just a slight recovery from the knee jerk response in July."
Sterling has performed reasonably well in the past few weeks, helped by better-than-expected data that has taken the edge off concerns about a sharp decline in economic activity following the shock Brexit vote in June.
The dollar extended its advance against the yen and the euro with some investors positioning for Friday's non-farm jobs report, which is set to shape the market's near-term U.S. interest rate expectations.
Against the yen, the dollar was up 0.2 percent at 103.66 yen , its highest in a month. The euro was down 0.1 percent at $1.1148. Nevertheless, traders were sceptical about the driving the dollar much higher before the jobs report. 

QNA