Sterling drops; caused by weak PMI

Wednesday, 1 June 2011 02:51

United Kingdom's Manufacturing PMI was released earlier today, causing Sterling to drop drastically against the Greenback and Euro as news were not as good as was expected.  Manufacturing Purchasing Managers' Index came out at 52.1 points, lower than revised 54.2.  UK PMI fell to a twenty-month low with 52.1 in May, weakest release since September 2009.  Expectations revised UK Manufacturing PMI to fall slightly off April's 54.4 results, to 54.2; 

Shortly after UK PMI release, the GBP spiraled downwards quickly, namely against the USD and EUR.  From 1.6480, the GBP fell to 1.6401 versus USD in the space of about five minutes within the release.  A very slight correction has been made as the pair is currently trading at 1.6419.

The Euro gained against the Pound, as it jumped from 0.8754 to 0.8794 soon after the release.  Presently, the pair is trading in between 0.8754 and 0.8794; at 0.8773