Another slightly weaker than expected batch of economic numbers, this time on manufacturing sentiment, prodded the pound a touch lower against a broadly stronger dollar this morning, crimping its gains against the euro to a quarter of a percent.
Sterling has been struggling in the face of figures in the past fortnight suggesting the UK economy was finally beginning to suffer from the uncertainty around Britain’s planned exit from the European Union over the next two years.
The regular survey of manufacturing purchasing managers today showed the factory sector growing more slowly than expected in February though still holding on to much of its strong, post-Brexit vote momentum in early 2017.
Bank of England figures released at the same time also showed the pace of credit growth slowing for a second month.
The dollar hit its highest in seven weeks as signs from two influential Federal Reserve policymakers that interest rates could rise this month overshadowed President Donald Trump’s first major policy speech to Congress.
Money market futures were now pricing in almost a 70 percent chance of a rise in official interest rates in March, compared to just over 30 percent on Tuesday.
Tuesday’s expectations that Trump would give details on stimulus plans that drove stellar gains in the dollar in November were largely disappointed.
In a speech that contrasted with harsher rhetoric during his election campaign, Trump said he was open to reforming the U.S. immigration system and pledged massive tax relief for the middle class, but did not expand further.