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Pound Lower As U.K. Private Sector Remains In Contraction

The pound declined against its major counterparts in the European session on Tuesday, as a data showed that nation’s private sector activity deteriorated for the third successive month in October.

Flash survey results from S&P Global and the Chartered Institute of Procurement & Supply showed that the composite output index rose slightly to 48.6 in October to 48.5 in the previous month. However, any score below 50 indicates contraction in the sector.

Both the manufacturing and service sectors experienced lower output, with the former showing a steeper rate of reduction.

The manufacturing PMI came in at a 3-month high of 45.2 in October versus 44.3 in the previous month.

The services business activity index fell to a 9-month low of 49.2 in October from 49.3 in September.

The pound eased to 0.8711 against the euro and 1.0875 against the franc, down from an early 5-day high of 0.8682 and a 6-day high of 1.0940, respectively. The currency is poised to challenge support around 0.88 against the euro and 1.01 against the franc.

The pound dropped to 1.2167 against the greenback and 182.35 against the yen, from its early nearly 2-week highs of 1.2288 and 183.75, respectively. The next possible support for the currency is seen around 1.20 against the greenback and 176.00 against the yen.

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