Investing.com - Sterling was little changed on Friday despite better than expected PMI data from August, which showed manufacturing output at a four-month high.
At 10:00 GMT, cable was flat at 1.2929. Sterling rose from the day’s low of 1.2906 on the back of the manufacturing data release.
IHS Markit, a market research group, released manufacturing Purchasing Manager’s Index data that showed UK manufacturing had risen to a seasonally adjusted 56.9 in August, up from 55.3 in July. The consensus reading was 55.0.
The improvement was attributed to an increase of new order inflows.
Although manufacturing only makes up around 10% of the UK economy, the higher than expected growth in the industry will be food for thought in September’s Bank of England Monetary Policy Committee meeting.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was barely changed at 92.62.
Investors awaited the release of the monthly employment report from the US. Thursday’s data dump garnered a mixed response, however the Q2 GDP upward revision to 3.0% and the ADP nonfarm payrolls earlier in the week caused the dollar to hold onto modest gains before the release of nonfarm payrolls at 12:30 GMT.
The eurozone released strong PMI data on Friday. EUR/GBP was 0.9200, down 0.12% at 10:00 GMT, near the day’s low of 0.9195. The euro had failed to reach near its 0.9305 Tuesday high.
The third round of Brexit talks concluded on Thursday in Brussels. David Davis, the UK’s Brexit S=secretary and Michel Barnier, the chief Brexit negotiator for the EU finished the talks with a tense press conference.
Barnier commented that “no decisive progress” had been made in the past week, save for some breakthrough with the Irish border. The question of the divorce bill and rights of citizens remain unanswered.
The pound made gains against commodity currencies. GBP/AUD climbed 0.27% to 1.6313, wile GBP/NZD was up 0.29% to 1.8066.
GBP/CAD was almost unchanged at 1.6145.
Modest gains were made against the safe haven currencies. GBP/JPY was up 0.11% at 142.36 and GBP/CHF was up 0.15% at 1.2420.
Investors will be looking for the hat-trick of PMI data on Monday and Tuesday next week, as construction and services will be announced respectively. Services PMI is a greater indication of the UK economy’s performance. It is expected to be unchanged at 54.9 for August.