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British pound daily update for 4th October 2017

BY DEB SHAW | 

After selling off for three days in a row, the pound is taking a breather today. Yesterday, poor Markit/CIPS construction PMIs came in far below expectations, leading to concerns that economic growth in the UK remains shaky. Earlier in the week, there were growing concerns that the different factions within the Conservative party are not on the same page regarding Brexit given recent comments by Boris Johnson. Specifically, Johnson's interview in The Sun, in which he revealed four 'red lines' regarding Brexit, suggests that a transition deal may be more distant than expected. 

GBP/USD has now fallen below 1.33, with the current exchange rate trading just below 1.3270. Over at EUR/GBP, after strengthening for the past three days, today the exchange rate is trading sideways. The pair is currently trading just above 0.8860. Finally, the pound is mostly flat against both the Australian dollar and the Canadian dollar. GBP/AUD is currently below 1.6880, while GBP/CAD is just below 1.6550.   

This week's economic releases includes a range of survey data. On Monday, Markit manufacturing PMIs were lower than expectations (55.9 vs. 56.4 expected). Yesterday's Markit/CIPS construction PMIs came in far below expectations (48.1 vs. 51 expected). Later today, we'll get Markit/CIPS services PMI data. 

Updated 
Short term outlook
Bearish
Medium term outlook
Bearish

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