The purchasing managers index (PMI) dropped to 50.5 in April from 51.9 in March, although it shows the manufacturing sector slowed we can still take some positives away, any figure over 50 on the index indicates growth and this is the fifth straight month the sector has grown. This will have limited sterling’s loses and the fact the pound is still seen as good alternative to the troubled single currency (Euro) meant rates soon recovered back over $1.62.
As I mentioned in yesterdays blog this week is a busy one in terms of U.S data releases and U.S manufacturing released today was stronger than forecast in April which is a good sign for the U.S economy. The institute for Supply and Management (ISM) said its manufacturing index increased to 54.8 in April compared to 53.4 in March. This caused a sudden fall of half a cent for pound/dollar rates and dropped to a low of $1.6188. The data will have eased fears after recent reports have suggested that the U.S economy could be slowing.
These two data releases have again indicated just how volatile the currency market can be. To put today movements into perspective a £200,000 trade performed at the low of the day would have seen you receive €1,140 less than the same trade performed just before the U.S data release. If you need to but or sell dollars in the coming weeks you can click here to send me a direct email or complete the contact form on the homepage of the blog.
