The US Institute for Supply Management Manufacturing index hit its lowest since January.

August’s figure stood at 49.4, down 3.2 points from July’s measure and missing estimates by 2.6 points. In January the index came in at 48.2 but improved since and remained above 50 for all months from March until July.

The ISM Prices Paid, an index for the business sentiment towards future inflation, also fell by 2 points, to 53.

The Markit Manufacturing PMI, released by Markit economics came at 52, only slightly lower than July’s 52.1 figure, but also 0.1 point below estimates.

A growth measure on construction spending, released by the US Census Bureau, increased from -0.6% in July to 0% in August, missing estimates of 0.5%.

However UK indicators for the performance of the manufacturing sector came in higher than expected, supporting the idea that the UK economy is recovering well from an initial post-Brexit shock.

Pound rises against Dollar

The unexpected drop in US manufacturing indices and positive developments in UK manufacturing contributed to a surge in the GBP against the USD.

The GBP appreciated nearly 1.22% against the USD between 9am and 4pm today, recovering the downfall since Yellen’s Fed speech on Friday and reaching a near one-month high.

At 4pm the GBP/USD stood at 1.32984.

Bullish movements of the GBP may also be aided by a statement of the IMF, admitting that short term instability seems to have “ebbed” since the Brexit-vote, noting that financial markets have fully recovered from post-Brexit slumps.

Katharina Fleiner 01/09/2016