The British pound gained today as the US dollar weakened following a sharp dip on Wall Street.
The pound was strengthened by the latest IHS Markit manufacturing survey which showed that the sector maintained steady growth in March.
Sterling rose 0.2 per cent to $1.41 this morning. The pound has had a strong performance since the British government secured a transition deal with the EU on its departure from the bloc.
The euro meanwhile, was up 0.18 per cent against the dollar.
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After China imposed tariffs on a number of US products, the dollar had fallen against the yen for the third straight day, but levelled out today as currency investors pulled back from the Japanese currency.
The S&P closed down 2.23 per cent on Monday, its worst start to April since the Great Depression. The Nasdaq index closed down 2.74 per cent following a sharp decline in technology shares, while the Dow Jones fell by 1.9 per cent.
Asian currencies like the Korean won, Taiwanese dollar, as well as the Australian dollar, which would normally fall sharply in response to the ramped up rhetoric surrounding a possible trade war, have all performed relatively well in recent days.
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The IHS Markit survey showed the UK’s Purchasing Managers’ Index (PMI) rose from 55 in February to 55.1 in March, marking the twentieth successive month of rises.
Analysts had expect the survey to come in as low as 54.7. Still, the report suggested that manufacturing growth had slowed since the beginning of the year, with the opening quarter overall the weakest in a year.
Rob Dobson, director at IHS Markit, said:
The latest PMI survey provided further evidence that UK manufacturing has entered a softer growth phase so far this year.
Although the pace of output expansion ticked higher in March, which is especially encouraging given the heavy snowfall during the month, this was offset by slower increases in new orders and employment.
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