British Pound Live on Monday 3rd of May: GBP outlook dominated by manufacturing PMI today; GBP/EUR and GBP/USD pairs trading higher

16:30: What will Tuesday the 4th bring GBP?

Tomorrow's agenda is dominated by the Construction PMI number, however we also hear from the BRC on retail sales and from Halifax conerning the perfomance of the UK housing sector.
See what the forecasters are expecting here.

15:46: Carney will weaken the pound warn RBS

Paul Robson at RBS says there should be no doubt that the pound will weaken under the new governorship of Mark Carney:

"We believe Carney has plenty of tools to weaken the exchange rate. Just look at the Bank of Japan and the JPY. We agree he is unlikely to talk down the pound directly. However, his policy actions will ultimately do this.

"If he doesn't change policy, then the market will do it for him as the economy stagnates, the twin deficits widen and GBP is seen as a funding currency. Given the government's fiscal conservatism, monetary activism mantra, it seems unlikely monetary policy is set to remain unchanged after Carney's arrival."

14:13: Despite today's gains, outlook for GBP vs EUR is technically challenging

Leander Dreyer at KBC Markets gives us his verdict on sterling's outlook against the euro:

"On Friday EUR/GBP to a large extent copied the price pattern in the EUR/USD headline pair. In a daily perspective, the pair lost some ground but basically the pair is still holding the sideways trading pattern in the mid 0.85 area.

"A sustained drop below 0.8400/0.8390 is needed to improve the picture for sterling. This level was already tested several times over the past two months as the ECB clearly reinstalled an easing bias and reduced its policy rate to 0.50%.

"However a sustained break didn’t succeed and the pair settled in a sideways consolidation pattern between 0.8400 and 0.8600. ECB policy will remain very accommodative in the foreseeable future. On the other hand, there is a lot of uncertainty on the UK policy framework once the new Governor Carney will start his job as BoE Chairman in July. For now we don’t see a big case for a break either way. We continue to play the range."

14:00: Spot rates in early afternoon; GBP looking solid

A look at the markets shows the pound euro rate at 11736; up 0.35 pct on Friday.
The pound US dollar is 0.33 pct higher at 1.5248.
The pound Canadian dollar is 0.09 pct higher at 1.5787.
The pound South African rate is 0.78 pct down at 15.2100.
Please Note: The above are taken from the spot markets; your bank will affix its own discretionary spread to these figures. However, an independent FX provider will guarantee to beat your bank's offer, thus delivering you more currency. Please find out more here.

13:25: Carney is next big BoE risk for British pound

Barclays give their thoughts ahead of the big Bank of England event-risk that lies ahead this week:

"There is little scope for any policy changes from the BoE on Wednesday, on either rates or the stock of asset purchases. The meeting will be the last for Governor King but we will likely need to wait until the meeting minutes are released for any new information. Governor-elect Carney’s arrival is the next major risk event for GBP, and our economists view the most likely policy change as an adoption by the MPC of more explicit forward guidance on interest rates. Linking policy to the unemployment rate would be particularly attractive."

11:55: A must read on why GBP is prone to hefty upside moves

Greg Anderson at BMO Capital Markets tells us there are two currencies where IMM leveraged fund positions are close to historical maximums. They are AUD and GBP. Read this great insight here.

11:40: Next currency market moving news is US PMI data

FX360 say that currency market players will now focus on the US:

"Attentions will now turn to the US PMI data, which is set to be released later in the session and comes at the start of what is expected to be a big week for forex markets. At a time when traders are concerned the US Federal Reserve will begin scaling back its quantitative easing programme on the back of strong data releases, today's PMI result is expected to represent only slight growth, while non-farm payroll figures are released on Friday."

10:11: "The Funding for Lending Scheme has been an absolute failure"

Also out today is data from the Bank of England that showed the Bank's flagship Funding for Lending scheme continues to underwhelm.

This news is sterling negative from a longer-term perspective.

Stewart Baird of Stone Ventures (Do note that this is an alternative finance provider) is particularly negative about this scheme saying:

"Net lending of -£0.3bn in the first quarter and -£1.8bn over the past year or so relays how limited the impact of the Funding for Lending Scheme has been.

"From a business lending perspective, the Funding for Lending Scheme has been an absolute failure. We certainly don't need to be told that net lending to business has largely been negative.

"Our discussions with smaller businesses suggest that the banks' criteria remain extremely tough. Their instinct, as paradoxical as it sounds, is not to lend.

"If a company doesn't have significant assets and security, the banks are especially risk-averse. I hold out little hope for the alleged plans of the FLS participants to lend more during 2013."

9:30: Sterling surges as Manufacturing PMI expands at fastest rate since March 2012

It's a beat for today's main data event. UK Manufacturing PMI came in at 51.3; consensus was for a figure of 50.1 - a convincing outcome.

"UK manufacturing expanding at fastest rate since March 2012 - Cable eyeing 1.53" say WorldFirst in response to today's manufacturing data release.

Forex.com give the following guidance for GBP/USD: "GBPUSD: gets above key resistance at 1.5260. 1.5280 then 1.5310-25 next short term resistance levels of note."

8:40: Latest spot exchange rates

The British pound is trading in solid fashion at the start of the Monday session:

Looking at the three 'bellwether' pairs we follow we see:

The pound euro exchange rate is 0.23 pct higher on Friday night's close at 1.1722.
The pound US dollar exchange rate is 0.35 pct higher at 1.5252.
The pound Australian dollar rate is 0.3 pct lower at 1.5835.

8:35: Ahead is UK Manufacturing PMI

This week is a busy one for the British pound, the highlight on Monday morning (9:30) is the latest instalment in the Markit PMI series which forms the highlight of the outlook for GBP this week.

UK manufacturing is forecast to have appreciated with consensus forecasts pencilling in a reading of 50.1; an improvement on last month's reading of 49.8.

Any miss will be negative for the British pound while a positive beat on expectations will send GBP higher.