Fundamental Comment

Pound fluctuates, on track for a weekly rise after PMI data

Pound fluctuates, on track for a weekly rise after PMI data

The British pound witnessed fluctuation versus the U.S. dollar during Friday's trading, but it is on its way to record a rise at the weekly basis, following the release of the services sector data in Britain.

The pound sterling traded at 1.2453 against the dollar, as of 11:40 GMT, after opening trading today at 1.2460, while it recorded the highest level at 1.2485 and the lowest level at 1.2436.

The historical recession suffered by British companies during the recent period witnessed stability during the month of June, with a gradual reopening of the British economy after the government eased measures to curb the spread of the Corona virus.

The PMI for the services sector rose during the month of June to 47.1, a little higher than the previous reading and expectations of 47.0, but the sector remained in the contraction zone since the reading was below the 50-level separating growth from contraction.

More than 25% of service providers in Britain reported an expansion in new business during the past month due to the return of demand and the gradual restart of the British economy.

In spite of this, the closing procedures continued to impede travel, entertainment and tourism operations, where the survey showed that 33% of the services companies that represent the largest part of the British economy recorded a decrease in activity, down from 54% during the month of May.

The Composite PMI, which groups the services and manufacturing sectors, rose to 47.7 in June, up from 30.0 in May and again slightly higher than the initial reading of 47.6.

In June, the Bank of England stated that the British economy was on its way to shrinking by about 20% in the first six months of 2020, a smaller decrease than initially feared, but it is still one of the largest annual declines in 300 years.

Share Article