All trading involves risk. Losses can exceed deposits.

Sterling lifted by manufacturing report

The pound is up 0.5% versus the US dollar after a large jump in UK manufacturing.

All trading involves risk. Losses can exceed deposits.

The pound is trading at $1.5577 following a higher-than-expected manufacturing purchasing managers index (PMI). After July's reading of 54.8 economists were expecting a level of 55.2, but the reading of 57.2 for August is the highest since February 2011. This is further proof that the UK economy is on the mend.

On Thursday the Bank of England announces the UK interest-rate decision as well as news about quantitative easing (QE). We are not expecting any change in policy, but if the minutes from the meeting are optimistic we could see the pound trade higher versus the dollar. Governor Mark Carney has now pegged QE policy to the level of unemployment, and the positive manufacturing report could be an indication that the jobless rate will also improve.

It is a public holiday in the US today so we are not expecting any economic udpates from across the pond. It is also likely that trading volumes will be light for the day as most US dealers have the day off. 

Spot FX GBP/USD chart

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

Find articles by analysts