Today’s figures out of the United Kingdom have put the pound sterling’s (GBP) latest uptick at risk of getting pared as investors anticipate a slow-down in British manufacturing. Today’s manufacturing PMI data disappointed traders with a reading well below expectations. This blow to the manufacturing and industrial sector of the British economy has begun to ram against the pound’s April gains, putting it at risk of a downturn through May.
While the Confederation of British Industry (CBI) did publish a better-than-forecast reading on industrial sales, the data came on the coattails of this morning’s disappointing PMI figure and do not appear to have been enough to lift the pound today.
This news comes after last week’s highly distressing industrial new orders data revealing a sharp contraction in the industrial sector of the British economy. Britain was not the only nation affected by this downturn in industry. The sluggishness appears to be global with the euro zone, Japan and the United States each experiencing its own trek through the metaphorical mud.
The pound was trading lower today as a result of this PMI downturn, with the GBP/USD falling to fresh 4-day lows and the GBP/JPY also sank with global investors turning to safe-havens. The shift into riskier assets late last week initially assisted the rise of the GBP, but this week’s poor fundamentals along with a dip in commodity prices has begun to adjust a number of portfolio positions and causing the pound to lose strength in its legs as its pairs falter. Look to the pound continuing to lose support if global industry remains in a downspin.