Forex - Sterling Extends Losses on Disappointing Factory Data

3 September 2018, 12: 32
© Reuters.  Sterling extends losses on disappointing factory data

The pound extended losses on Monday after data showing that UK manufacturing activity fell to its lowest level in two years in August, weighed down by jitters over Brexit and the U.S.-China trade war.

GBP/USD was down 0.56% to 1.2884 by 05:25 AM ET (09:25 AM GMT), off an intra-day high of 1.2933.

The pound added to early losses after data showing that the Markit UK manufacturing index dropped to 52.8 in August, down from 53.8 in July.

It was the weakest reading in 25 months. Survey compiler Markit said new exports fell last month for the first time in two years. This dragged job creation down to near-stagnation, while business optimism hit a 22-month low.

Sterling had already come under pressure after the European Union's chief Brexit negotiator Michel Barnier said Sunday that he is “strongly” opposed to British Prime Minister Theresa May’s proposals on future trade after Brexit.

The comments added to concerns over the prospect of a no-deal Brexit.

The pound was also lower against the euro, with EUR/GBP advancing 0.64% to 0.9009.