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British PMI figures boosts Pound

23 Jun 2020

Following reports hinting that UK Prime Minister Boris Johnson will be further announcing whether more lockdown measures will be lifted, with the hospitality sector awaiting the order to reopen on July 4th. Additionally, shop owners are hoping that the two-metre distancing rule will also be eased as they noted that it is affecting its business. 

Moreover, the UK Manufacturing PMI bettered estimates, coming in at 50.1 for June, against the 45 expected, IHS Markit showed this morning. The UK economy continued to see good news as flash UK Services Business Activity Index for June beat estimates as well, at 47. Estimates were at 40. 

As a result, the British Pound gained sentiment as traders look to see the UK economy restarting. The GBP/USD gained as a consequence, being traded over the 1.2500 psychological mark.  

The losses suffered by the Pound to New Zealand Dollar exchange rate were overturned after a drop in risk appetite. This was after Peter Navarro, the White House’s trade adviser noted that talks between the U.S. and China are “over”. 

Additionally, the New Zealand dollar declined as the coronavirus resurfaced in the country. Comments from the head of the U.S. Federal Reserve also had the Kiwi economy to shrink by 1.6% - the worst contraction in 29 years.