RationalFX : The pound weakened on Friday and is set for its biggest daily loss in nearly three weeks. Surveys showed British business is suffering its deepest downturn since mid 2016, with caution rising before the 12th December general election…..
The first ‘flash’ reading of the IHS Markit/CIPS UK Purchasing Managers’ Indexes (PMI) for Britain showed that declines in both the services and manufacturing sectors quickened in November.
The survey, closely watched at the Bank of England, adds weight to the views of two of its nine monetary policymakers who earlier this month voted for an interest rate cut.
Investors are adopting a wait-and-see attitude before the election, at which voters face a stark choice: a socialist vision pushed by opposition leader Jeremy Corbyn, including widespread nationalisation and free public services, or Boris Johnson’s drive to deliver Brexit within months and to build a ‘dynamic market economy’.
The US dollar shook off early weakness to advance against a basket of currencies on Friday. Data showed US factory and services activity quickened in November in a sign of the continued resilience of the US economy.
IHS Markit said its ‘flash’ purchasing managers index (PMI) for manufacturing rose to 52.2 in November from a final reading of 51.3 in October, while its preliminary services PMI increased to 51.6 this month from 50.6 last month.
Helping the dollar’s strength was a survey which showed eurozone business growth almost ground to a halt this month, as activity in the bloc’s dominant services industry increased at a much weaker pace than expected and it contracted again among manufacturers.
Mixed messages on the US-China trade deal this week kept investors from taking on any large directional positions ahead of next week’s Thanksgiving holiday. Chinese President Xi Jinping said Beijing wants to work out a deal with Washington and has been trying to avoid a trade war – but is not afraid to retaliate when necessary.
A senior Chinese diplomat urged the United States to compromise in order to develop stable relations between the countries, saying that some US politicians were trying to push the countries into confrontation.
Source : ETFWorld.co.uk