The Great Britain pound dropped today as UK manufacturing expanded last month less that was expected, while speculations about Dectaper continued to plague the Forex market. The currency also erased today’s gains versus the euro.
The Markit/CIPS UK Manufacturing Purchasing Managers’ Index fell a bit from 56.3 in September (revised from 56.7) to 56.0 in October. The index remained at an elevated level, but economists have expected it to stay at the previous value.
Market participants continued to speculate about possible quantitative easing tampering in December (Dectaper) and such talks was affecting most currencies (with the exception of the US dollar of course) negatively. Federal Reserve Bank of St. Louis President James Bullard fueled speculations, saying “the likelihood of tapering asset purchases will continue to rise”. It is hard to imagine that the US central bank will manage to reduce stimulus just before another round of budget debates, but it looks like the market sentiment favors such outcome.
GBP/USD fell from 1.6034 to 1.5922 and GBP/JPY dropped from 157.71 to 157.24 as of 21:51 GMT today. EUR/GBP traded at 0.8470 after falling from 0.8468 to 0.8443 earlier.
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