2016.07.2213:12:00UTC+00Dollar Surges Against British Pound On Weak U.K. Private Sector Data

The dollar is gaining ground against all of its major competitors Friday afternoon. There has been no U.S. data to drive the direction of trading at the end of the week, but a disappointing U.K. private sector report has driven the buck sharply higher against the pound sterling.

Central banks were also in focus at the end of the trading week. Hopes for further stimulus measures from the Bank of Japan and the European Central Bank have begun to fade. The European Central Bank left its key interest rates unchanged in its first policy session after "Brexit" yesterday.

There were also reports that the Bank of Japan may hold off implementing additional easing measures at its meeting next week. Some BoJ officials are of the opinion that delay in attaining the BoJ's inflationary goal wouldn't warrant immediate easing, as a tighter labor market eventually boost wages and feed into consumer prices, Reuters news agency reported.

In addition to the Bank of Japan meeting next week, investors are looking forward to the Federal Reserve's 2-day policy meeting. The meeting will begin Tuesday and conclude Wednesday afternoon next week.

The Fed is widely expected to leave interest rates unchanged as officials wait to see the fallout from Britain's vote to leave the European Union.

Nonetheless, the central bank's accompanying statement is likely to be in focus, as investors attempt to gauge the outlook for the next rate hike.

The dollar has jumped to $1.31 against the pound sterling this afternoon, from an early low of $1.3289.

The U.K. private sector activity contracted at the steepest pace since early 2009, after Britons voted to leave the European Union in a surprise move, a closely watched survey showed Friday. The flash composite output index fell to an 87-month low of 47.7 in July from 52.4 in June, according to flash survey results from Markit and the Chartered Institute of Procurement & Supply.

The buck has broken out to nearly a 1-month high of $1.0965 against the Euro Friday afternoon, from a low of $1.1040 this morning.

Eurozone private sector expanded at the weakest pace in 18 months in July, but remained resilient in the face of the surprise "Brexit" vote and the terror attack in France. The flash composite output index fell to 52.9 in July, an 18-month low, from 53.1 in June, preliminary results of a survey by Markit showed Friday. Economists had forecast a weaker score of 52.5.

Germany's private sector expanded at the fastest pace in seven months in July, flash survey results from Markit showed Friday. The flash composite output index rose to 55.3 from 54.4 in June. The index reached its highest level in 2016 so far with both manufacturers and service providers reporting stronger expansions.

The French private sector stagnated in July as the growth in services was offset by a contraction in manufacturing, survey data showed Friday. The composite output index rose to neutral 50.0 in July from 49.6 in June, flash report from Markit revealed today.

The greenback has risen to around Y106.200 against the Japanese Yen this afternoon, from a low of Y105.547 this morning.

Japan's manufacturing sector contracted again in July but the pace of deterioration slowed, flash survey data from Markit showed Friday. The manufacturing Purchasing Managers' Index rose to 49 in July from 48.1 in June.