The British currency weakened against its key counterparts in the early European session on Friday after data showed that UK’s manufacturing activity expanded at a slower than expected rate in July.
Data from the Markit Economics and the Chartered Institute of Purchasing and Logistics , or CIPS, showed that UK’s manufacturing activity expanded at a slower than expected rate in July as growth in output and new orders slowed.
The Makit/CIPS manufacturing purchasing managers’ index, or PMI, decreased to 55.4 in July from 57.2 in June, but remained above the survey average of 51.5. Economists expected the index to come in at 57.2.
This marked the seventeenth consecutive month of expansion in activity. A reading above 50 indicates expansion by the manufacturing sector.
Manufacturing production continued to increase in July, though the rate of increase slipped to its lowest in over a year. New orders also continued to improve but at a slower rate than in June. Staffing levels rose for the fifteenth successive month in July. However, the rate of increase slowed to a nine month low.
The pound fell to nearly a 2-month low of 1.6827 against the US dollar, from an early high of 1.6892. At yesterday’s close, the pound was trading at 1.6882 against the greenback.If the pound extends its downtrend, it is likely to find support around the 1.67 zone.