Pound dips despite strong Mfg. PMI
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The British pound has reversed directions on Tuesday. The pair is currently trading at 1.4173, down 0.29% on the day.
On the fundamental front, UK Manufacturing PMI accelerated for a fourth straight month. The PMI surged in May, rising from 60.9 to 65.6. Still, analysts had expected more, as the consensus stood at 66.1. The 50-level separates contraction from expansion. The manufacturing sector has now reeled off 12 consecutive months of expansion.
As Covid infection rates continue to drop, the UK government has been easing health restrictions and economic activity is enjoying a resurgence. As the economy heats up, speculation has been rising as to whether the Bank of England will have to re-evaluate its ultra-accommodative monetary policy. Investors are keeping a close eye on comments from BoE policymakers, and any signals of a tightening in policy are likely to provide a boost to the pound.
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