UK Services Sector Slips To A 11-Month Low

 
 
mechanic
mechanic
PAPHOS, Cyprus - Sept. 5, 2017 - PRLog -- UK Services Sector Slips to 11-Month Low

The UK services sector growth hit an eleven-month low, slowing further in August, according to a survey published by IHS Markit. New orders' growth slowed down as customers are affected by the uncertainty over Brexit. Markit's analysts suggest that "the slowdown in services and construction send warning signals about the health of the British economy."

IHS Markit also released the services sector growth data for the countries of the Eurozone, which in most cases came below expectations. The Spanish, Italian and French services sectors underperformed in August, but analysts pointed out that the drop in pace of growth is from multi-year highs. Germany and Ireland were the only countries that broke the negative trend.

Pound Sterling – UK Markets

Today, the Pound dropped against the US Dollar with the exchange rate set at $1.29. On the contrary, Sterling strengthened against the Euro with the exchange rate set at €1.08.

The UK services sector growth in August dropped to an eleven-month low, according to a survey conducted by IHS Markit. The country's services sector makes up 80% of the total national output. Firms which participated in the Markit's survey complained about subdued client demand and stressed that Brexit uncertainty makes customers postpone their spending plans. However, job creation in the services sector was up for the third straight month, recording a nineteen-month high.

Car sales in the UK fell in August for the fifth consecutive month. Car registrations were reduced by 6.4% and, overall, car sales in 2017 have been down by 2.4%, when compared with the previous year. According to the report by the Society for Motor Manufacturers and Traders, potential car buyers tend to delay their purchases until the arrival of a new number plate in September. The report notes that hybrid and electric car sales increased, while the demand for diesel cars declined.

US Dollar – US Markets

The US Dollar advanced against the Euro with the exchange rate set at €0.84. The US Dollar Index (DXY), which measures the value of the Dollar against six major currencies, improved coming in at 92.67.

According to Reuters sources, North Korea will proceed to test an intercontinental ballistic missile, possibly, before Saturday. This triggered a risk-off approach by traders across global financial markets. The US agreed to remove warhead restrictions on South Korean missiles, a change that will allow the South Korean defence industry to produce more powerful weapons, boosting the country's offensive capabilities.

After the weapons' deal with Saudi Arabia, Donald Trump approved yesterday a new multibillion dollar deal with South Korea for the sale of weapons and equipment. Analysts suggest that his threat to take the US out of a free trade agreement with South Korea worked in favour of the US defence industry companies. Later in the evening, three members of the Fed's board will be delivering speeches in various forums and analysts will be expecting to listen to their views on the Fed's policy.

Euro – European Markets

The Euro dipped against the US Dollar with the exchange rate set at $1.18. IHS Markit published its Services and Composite PMI data for the countries of the Eurozone, which in most cases came below market expectations.

The Eurozone's service sector growth in August hit a seven-month low with its PMI coming in at 54.7 instead of the 54.9 anticipated reading. The Eurozone's Composite PMI, which combines the Manufacturing and the Services PMI, also missed expectations coming in at 55.7, instead of 55.8. The services' sector growth in France, Spain and Italy experienced a decline, which wasn't expected by analysts.

Germany and Ireland were the only countries that broke the negative trend in August. Germany's Composite PMI came in at 55.8, better than the expected 55.7 reading, showing that economic growth is strong in the largest economy of the Eurozone. The Irish Composite PMI came in at 58.2, which is a three-month high. A data release by Eurostat showed that retail sales in Eurozone grew by 2.6%, on a year-to-year basis, in July. On a monthly basis, retail sales declined by 0.3%, instead of a 0.1% decline expected.

Other Currencies – Highlights

Sterling slumped against the Australian Dollar, trading at 1.62 AUD. The Reserve Bank of Australia (RBA) left its benchmark interest rate unchanged at 1.5%. The RBA's board omitted to make a reference to the central forecast for economic growth of around 3%, as it had done in its statement released after its August meeting. An ING report said that there will be no change in the RBA's policy stance, at least, until the first quarter of the next year.

The Pound dipped against the New Zealand Dollar, trading at 1.80 NZD. Westpac's research analysts suggested in a report that the market pricing for a hike in interest rates by the Reserve Bank of New Zealand (RBNZ) by September next year is still too optimistic. Their analysis shows that inflation will be lower than in the previous forecasts and a rate hike should be expected in November 2019. In another report, Westpac economists suggest that a weaker than expected construction activity in the second quarter in New Zealand will affect the GDP growth, which will underperform the RBNZ's forecasts.

Sterling edged up against the Swiss Franc, trading at 1.24 CHF. The Swiss GDP expanded in a faster pace (0.3%) in the second quarter than in the first quarter (0.1%). Market experts were expecting a 0.5% GDP growth. Inflation in August remained stable at 0.5%, on a yearly basis.

https://www.currencysolutions.co.uk/news/uk-services-sect...

Contact
Currency Solutions
***@currencysolutions.com
End
Source: » Follow
Email:***@currencysolutions.com
Posted By:***@currencysolutions.com Email Verified
Tags:Pound, Dollar, Euro
Industry:Financial
Location:Paphos - Paphos - Cyprus
Account Email Address Verified     Account Phone Number Verified     Disclaimer     Report Abuse
Currency Solutions PRs
Trending News
Most Viewed
Top Daily News



Like PRLog?
9K2K1K
Click to Share