Downward revision in July UK manufacturing PMI to 51.2 from 52.8 weighs on the Pound amid broader USD strength.
The British Pound retreated to around 1.3450 against the US Dollar on Monday, paring earlier gains after July’s UK S&P Global Manufacturing PMI was revised downward to 51.2 from a preliminary 52.8. The final reading marks a slowdown from June’s 52.5, signaling weaker sector activity than initially expected.
Market sentiment had initially lifted the Pound during the Asian session on reports of halted hostilities between the US and Iran, but the softer PMI data offset those gains. The US Dollar also faced pressure following coordinated intervention by US and Japanese authorities to support the Japanese Yen, which dropped over 3.5% last week.
Analysts suggest the weaker UK data could prompt a downward adjustment in interest rate expectations, creating headwinds for the Pound. The swaps curve may reflect reduced tightening bets, further capping GBP upside.