The Pound is moving lower versus the US Dollar, slipping back from a 13 day high reached in the previous session and snapping a 2-day winning streak. The Pound US Dollar exchange rate settled on Thursday over 1% higher at US$1.2599 on broad US Dollar weakness.
At 07:15 UTC GBP/USD is trading -0.25% lower at US$1.2565. This is towards the lower end of its daily traded range of US$1.2555 – US$1.2693 as investors remain cautious ahead of the manufacturing PMI’s from both the US and UK.
Manufacturing PMI To Drop to 32.8
The Pound is trading on the back foot following a report from an industry body revealed that UK manufacturing output is at risk of falling by more than 50% in the current quarter after 80% of manufacturers reported a collapse in orders owing to the coronavirus crisis.
The report comes as investors look ahead to the release of UK manufacturing PMI. Analysts are forecasting that activity slumped in April to 32.8 on the index, where 50 separates expansion from contraction amid the ongoing lock down. Today’s data will help investors gauge the extent of the devastation that the lock down is causing.
On Thursday Boris Johnson gave his first press conference since recovering from coronavirus. He said that the UK was past the peak and pledged to present the UK exit strategy next week. The news lifted the Pound on Thursday.
Safe Haven Dollar Rises As Trump Threatens China
The safe haven US Dollar is pushing higher in early trade on Friday after sobering comments from US tech companies and amid fears of a second chapter to the US China trade war. President Trump threatened of further trade tariffs on China and retaliatory measures against Beijing over the coronavirus outbreak.
The pandemic has costs thousands of American lives, resulted in 30 million job losses and is threatening President Trump’s chances of re-election. President Trump is increasingly frustrated with Beijing over the outbreak and his team are looking into a range of options against China. The geopolitical tensions are boosting demand for safe haven US Dollar.
Investors will now look towards US ISM manufacturing output data. Analysts are expecting a sharp fall in manufacturing activity in April after the indicator hovered close to 50 in March.
