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Pound Slides Amid Weak PMI Data
(RTTNews) - The pound dropped against its major counterparts in the European session on Tuesday, following the release of weaker-than-expected private sector activity for May.
Flash survey results from S&P Global and Chartered Institute of Procurement & Supply showed that the composite output index dropped to a two-month low of 53.9 in May from 54.9 in April. The expected score was 54.6.
Nonetheless, any reading above 50 indicates expansion in the sector.
The Service Purchasing Managers' Index, or PMI, fell to a two-month low of 55.1 in May from 55.9 in the previous month. The reading was expected to fall marginally to 55.5.
The manufacturing sector continued to remain in contraction in May and the corresponding PMI fell to 46.9 from 47.8 in April.
The pound dropped to near a 5-week low of 1.2372 against the greenback and a 6-day low of 0.8718 against the euro, off its early highs of 1.2446 and 0.8681, respectively. The pound is seen challenging support around 1.21 against the greenback and 0.90 against the euro. . The pound edged down to 1.1145 against the franc and 171.28 against the yen, from an early high of 1.1178 and more than a 7-year high of 172.62, respectively. Next immediate support for the currency is seen around 1.10 against the franc and 168.00 against the yen.
U.S. new home sales data for April is slated for release shortly.
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