The pound posted its biggest loss in more than a week following an industry report that revealed that U.K. manufacturing output increased by the weakest pace in 12 months in July.
The sterling tumbled 0.3 percent to trade at $1.6832 as of 10:08 a.m. in London, the steepest decline since July 24. The currency hit $1.6829, the lowest point since June 12 and has lost 0.8 percent of its value this week. The pound retreated 0.3 percent to 79.54 pence per euro, as it looked set to post a 0.5 percent decline.
“With weak data, sterling will be pressured lower,” Roberto Mialich, a Milan-based senior currency strategist at UniCredit SpA, told Bloomberg. “The firmer dollar or disappointing U.K. data — as emerged of late — may keep the pound on a sluggish tone.”
The pound fell versus the euro for the fifth straight day after the UK purchasing managers’ index plunged to 55.4 compared with 57.2 in June, reported Markit Economics. Yield of 10-year government bonds increased 0.02 percentage point or two basis points to 2.62 percent. This week, the rate appreciated five basis points. The 2.25 percent bond that matures in September 2023 plunged 0.12 to 97.045.
Meanwhile, the Thailand’s baht fell the most in a week this year after a report indicating that the U.S. economy is strengthening spurred bets that the Federal Reserve may increase interest rates next year.
The baht plunged 0.4 percent on Friday to trade at 32.350 per dollar in late afternoon trading in Bangkok, bringing its total weekly loss to 1.2 percent. The currency had earlier fell to 32.29, its lowest level in three weeks. The booming U.S. economy got Thai dealers anxious that the Fed may tighten policy, driving capital away from emerging markets. To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/newsletter.
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