The UK currency was unable to regain the 1.65 level during Thursday and weakened to lows around 1.6320. Sterling proved to be broadly resilient following the US payroll data and edged back towards the 1.64 level later in New York trading. Sterling found support weaker than the 0.86 level against the Euro.
The construction PMI index for June weakened to 44.5 from 45.9 previously, ending the run of improvements seen over the past few months. The UK PMI services-sector data will be watched closely on Friday. Any monthly deterioration would tend to undermine confidence in the UK currency, although the impact should be limited if the index holds above the 50 level.
Sterling will also be much more vulnerable if there is a general deterioration in risk appetite even though it proved to be generally resilient on Thursday.
By: Darrell Jobman
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