Pound sterling is lower against safe haven currencies today - the British pound is currently selling off against the US dollar and the Japanese yen. The currency is also slightly lower against the euro. Yesterday, the pound was fairly weak thanks to services PMIs that missed expectations by a wide margin. As professional services dominate the UK's exports, the pound is fairly sensitive to changes in services sector sentiment. While the previous month's figures were ahead of expectations, the data suggests that the UK's economy is now decelerating alongside slowing growth across most of Europe.
Turning to news, President Trump has threatened to impose more tariffs targeting $100b worth of Chinese trade. Rising geopolitical risks and slowing growth across Europe remains a threat to the pound. Following recent weakness, we will downgrade our short-term outlook on the currency to neutral later today. Our medium-term outlook on the pound remains bullish.
GBP/USD is currently above 1.3990. EUR/GBP is up slightly, with the exchange rate above 0.8740. The pound is up against the Australian dollar and down against the Canadian dollar. GBP/AUD is currently above 1.8240, while GBP/CAD is above 1.7890.
This is a fairly light week for economic data relating to the British pound. Markit manufacturing PMIs (March) were ahead of expectations (55.1 vs. 54.7 expected). The BRC shop price index for January (-1.0% vs. -0.8% expected) was slightly worse than previous figures. Construction PMIs for March (47 vs. 50.8) missed expectations due to weather-related concerns. Markit services PMIs for March (51.7 vs. 54 expected) missed expectations by a wide margin. Last week, the final-take of Q4 GDP growth (1.4%) met expectations.