British pound daily update for 5th October 2017


Yesterday started off well for the pound, as the currency initially traded sideways at the start of the day and ultimately rose on strong services PMI data. As the UK is a services-based economy, survey data covering professional services firms are watched closely by markets. However, later in the day, the pound fell (especially relative to the US dollar) as US economic data also came in above expectations. 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 is currently trading around 1.3230. Over at EUR/GBP, the exchange rate is taking a breather after strengthening for the past four days. The pair is currently trading just above 0.8880. Finally, the pound is up against the Australian dollar while trading sideways against the Canadian dollar. GBP/AUD is currently above 1.6910, while GBP/CAD is just below 1.6520.   

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). Tuesday's Markit/CIPS construction PMIs came in far below expectations (48.1 vs. 51 expected). On Thursday, Markit/CIPS services PMI data beat expectations (53.6 vs 53.2 expected).