Private DCN Private DCN - Sterling

GBP: Will manufacturing break sterling’s range?

By Michael Cooper March 1st, 2017

Sterling (GBP, pound) continued to be range bound and slightly weaker after a lack of movement from the House of Lords with regards to amendments they want to make to Article 50. Staying on this theme, former Chancellor of the Exchequer, George Osborne has warned that exiting the European Union without any trade deal would amount to “the biggest act of protectionism in British history”.

On Wednesday the first of three key purchasing managers indexes is released, in the shape of the manufacturing Purchasing Managers Index (PMI). This could provide a good indication of how the UK economy is performing. Given the weak British pound (GBP), the index is expected to remain elevated, although the pace of expansion is expected to tail off from the previous month. In addition, net lending – a monthly measure of growth rates, amounts outstanding and changes in total lending to individuals, divided into lending secured on dwellings and consumer credit – is expected to continue to increase, albeit not as a aggressively as last month, which could be any early indication that confidence is starting to taper.