UK – manufacturing better than expectations

Sterling steadied this morning against the dollar after falling this week over worries Britain will not secure a Brexit transition deal, while traders waited for UK manufacturing data.

Manufacturing came in higher than expectations of 55.0%. The data showed Manufacturing was up to 55.2%

Also, this morning we had the UK Mortgage approvals data which came in better than expectations.

Sterling has struggled to build on a rally earlier this year amid warnings by the European Union’s chief negotiator Michel Barnier that a transitional deal – designed to give Britain and the EU more time to agree on the terms of exit – was not guaranteed.

The market is pricing in a May interest rate hike by the Bank of England, although the central bank has said its monetary outlook is dependent on smooth negotiations with the EU over Brexit.

The dollar hit a six-week high today, supported by what was perceived as an upbeat tone from new Federal Reserve chief Jerome Powell on the U.S. economy, bolstering bets that interest rates will be hiked four times this year in the United States.

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