PMI data causes sterling to fall
Sterling fell on Friday against both the US dollar and euro after the UK Purchasing Managers’ Index (PMI) fell to a four-month low. The PMI fell to a low of 52.9 in October from 56.5 in September.
The UK’s economic recovery has stalled since August. The threat of a second wave of coronavirus cases, Brexit uncertainty and potential negative interest rates are all downside risks for the British currency.
Brexit talks are set to continue until Wednesday this week with Michel Barnier stating ‘each day counts’ and calls for ‘fundamental changes’ to be made. Furthermore fishing rights remain a stumbling block as France refuses to budge, but Angela Merkel is being touted by government sources to be able to break the deadlock in talks.
The US dollar remained stable on Friday. Surges of new cases of coronavirus in Europe and the US, and a lack of progress towards the stimulus package put investors in a cautious mood.
US House Speaker Nancy Pelosi said on Sunday that she expected a White House response on Monday regarding the latest stimulus spending plan, but there have been few tangible signs that a long-stalled deal is actually nearer.
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