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Sterling gains as dollar continues to weaken

Sterling gained this morning as the dollar fell and data showed British manufacturing gaining a little bit of momentum ahead of an expected interest rate rise in May.

Manufacturing growth in Britain cooled to a one-year low in the first quarter of 2018, according to a survey on Tuesday that suggested the economy remains on a slow but steady course a year ahead of Brexit.

The IHS Markit/CIPS UK Manufacturing Purchasing Managers’ Index (PMI) inched up to 55.1 in March from a downwardly revised 55.0 in February, beating the 54.5 consensus in a preliminary poll of economists.

January’s reading was also revised lower and for the first quarter, the PMI suggested factory output rose at a quarterly rate of about 0.4 percent to 0.5 percent, slowing from 1.3 percent in the fourth quarter of 2017.

Manufacturing, which accounts for about 10 percent of Britain’s economy, was a relative bright spot for Britain’s economy late last year when growth for the economy was the weakest among the Group of Seven rich nations. The slowdown was due in large part to weaker consumer demand caused by higher inflation after June 2016’s Brexit vote.

A PMI published earlier on Tuesday showed growth in eurozone manufacturers slid to an eight-month low in March, although they continued to outpace their British peers.

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