The British pound is lower against the US dollar on Friday.
Having tumbled on month-end repositioning, the dollar was back in form on Friday on the first day of May with many markets in Europe closed.
The pound dipped in line with broader market sentiment that was hit by rhetoric from US Donald trump that he might be about to revamp the trade war with China.
GBPUSD was down by 57 pips (-0.45%) to 1.2535 as of 2pm GMT.
The currency pair gradually drifted down from an overnight peak above 1.26 to just under 1.255. Yesterday the exchange rate fell jumped 1.01% leaving it +1.37% on the week.
GBP: UK April manufacturing data confirmed as worst on record
The final April manufacturing PMI for the UK came in broadly in line with the preliminary estimate at a record low of 32.6 vs. 32.8. Markit who released the data commented “UK manufacturing suffered its worst month in recent history in April, as output, orders books and employment all fell at rates far surpassing anything seen in the PMI survey’s 28-year history.”
The April manufacturing data for the UK is no better or worse than other developed countries fighting off the virus with lockdown and social distancing measures that have forced businesses to shut and left people without jobs.
What potentially is worse for the UK, and what means these kinds of readings could extend further than in other countries is the longer period of lockdown planned by the Boris Johnson government.
USD: Trump threats send traders to havens
The dollar was back on the front foot on Friday but market liquidity was thin with many in Europe celebrating the Labour Day holiday, meaning the moves could of less significance with many market participants away.
With Wall Street pointing to losses in excess of -2% on Friday, some of the gains in the dollar will be haven flows.
US President Donald Trump has been escalating the anti-China rhetoric, beating the drum for more explanation from the world’s second largest economy about the origins of the coronavirus, and suggesting the possible need for further tariffs.
