Sterling heads for longest run of daily losses since 2020

economictimes.indiatimes.com:

pound headed for a seventh straight day of losses on Monday against the dollar, its longest losing streak since the onset of the pandemic in 2020, after a survey showed Britain's private sector growing at its slowest pace in six months in July. The S&P Global/CIPS composite Purchasing Managers' Index showed a preliminary reading of 50.7, down from 52.8 in June in the biggest month-on-month drop in 11 months. Although above the 50-level that separates growth from contraction, it was the weakest reading since January.Sterling was last down 0.2% on the day at $1.2827 having touched a session low earlier of $1.2808 after a preliminary survey of UK business activity showed a downturn in British manufacturing deepened, while the service sector also slowed.

«Rising interest rates and the higher cost of living appear to be taking an increased toll on households, dampening a post-pandemic rebound in spending on leisure activities» said Chris Williamson, chief business economist at S&P Global, which produces the data. «Meanwhile, manufacturers are cutting production in response to a worryingly severe downturn in orders, both from domestic and export markets,» he said. The pound has fallen for seven days in a row against the dollar, its longest losing streak since mid-March 2020.

Rate expectations in Britain have fluctuated wildly this month. Two weeks ago, money markets showed traders believed UK rates would peak at around 6.2% by next June. Data points that have pointed to slowing inflation and weaker growth have prompted a reassessment that shows traders expect a peak of just 5.77% in rates by February, from 5% now.