- Pound Gains After Solid Manufacturing Growth
The British pound climbed against the US dollar after a data showed manufacturing sector grew faster than projected in July.
The U.K. manufacturing activities expanded 55.1 in July from 54.2 recorded in June, the IHS Markit report showed. This is higher than analysts’ forecast of 54.5.
Experts have attributed the solid gain to surge in export orders due to the weak pound sterling. This is the highest advance in export orders in 7 years.
“Although the exchange rate remains a key driver of export growth, manufacturers also benefited from stronger economic growth in key markets in the euro area, North America and Asia-Pacific regions,” said Rob Dobson, a director at Markit.
The pickup in foreign demand indicates global recovery is gaining traction and signs that investment in is picking up. Especially in the euro-area.
“Continued expansion is also still filtering through to the labour market, with the latest round of manufacturing job creation among the best seen over the past three years,” Dobson added.
The pound rose to a 10 month high against the US dollar after the report was published.