Weak data hurts sterling


Sterling started the new decade on the back foot as weak manufacturing data and elevated fears of laborious trade talks with the EU over the coming months continue to mount pressure on GBP.

During Thursday’s trade sterling had its biggest daily decline in just over a week, falling 0.5% against USD to a low of 1.3099 and 0.5% against the EUR to 1.1740.

Sterling was hampered in early trade following the latest release of the British Manufacturing PMI which showed factory output falling from 49.1 in November to 45.6 in December, its largest fall since 2012 when the UK was recovering from a recession. Slowing global demand and UK firms reducing stockpiled inventory in the case of a no-deal Brexit has dragged on the sector. This data release follows a Bank of England survey of 3000 CFOs from small, medium and large businesses; 42% felt the lack of clarity over Brexit is likely to persist until 2021.

Key Announcements

13.00 – EUR: Harmonized Index of Consumer Prices (YoY) (Dec) Expectation 1.4% from 1.2% previous.
15.00 – USD: ISM Manufacturing PMI (Dec) Expected 49 Previous 48.1.
19:00 - USD: FOMC Minutes.