As the UK returned after a long weekend, the Pound was holding steady and seemed to be going higher. However, after the release of the Manufacturing PMI, Sterling fell and continued to slide against the Greenback and the Euro. Manufacturing for the UK fell into contraction for the first time in three years as the reading for April came in at 49.2 from March’s 50.7. This is the first time the reading has fell since 2013, and comes as the uncertainty of the EU Referendum gets ever close. There has also been a fall in new business overseas as all await to see if the UK will remain in the EU. As domestic demand on this sector continues to soften, and the slowdown in the energy industry hits British companies, the Pound is now being heavily sold as a result.
Whilst consumer spending in the UK is fueling the economic expansion and seems to be simmering, the main data release today will be the Construction PMI figure, if another contraction figure is posted this could result in a weaker Pound. Expectations are for the Pound to remain constant and remain in expansion around 54. After lunch time, the private ADP Employment figure will be released from the US, where markets will look to gauge this correlation to the all important Non-Farm figure on Friday. Also from the US, the ISM Non-Manufacturing PMI figure will hit the wires in the afternoon, with consensus for this to remain constant at 54.9.