Forex Opinion & Analysis

British Pound Eyes PMIs Reports

  GBP/USD -0.14% Add to/Remove from Watchlist Add to Watchlist Add Position

Position added successfully to:

Please name your holdings portfolio Type: BUY SELL Date:   Amount: Price Point Value: Leverage: 1:1 1:10 1:25 1:50 1:100 1:200 1:400 1:500 1:1000 Commission:   Create New Watchlist Create Create a new holdings portfolio Add Create + Add another position Close

  • UK order expectations decline
  • Manufacturing and services PMIs are expected to tick lower on Wednesday

The British pound started the Tuesday session in positive territory but has given up these gains. In North American trade, GBP/USD is trading at 1.2737, down 0.16%.

UK manufacturing continues to sputter

The Confederation of British Industry industrial order expectations fell to -15 in August, down from -9 in July and missing the consensus estimate of -13. Output volumes for the past three months fell to -19, a huge decline from the July reading of +3. The data paints a grim picture of the manufacturing sector, and Wednesday’s manufacturing PMI is expected to point to ongoing contraction (the 50.0 line separates expansion from contraction). The August estimate stands at 45.0, compared to 45.3 in July, which was the lowest reading since May 2020. The manufacturing PMI last indicated to expansion in July 2022.

The services sector has looked better and is in expansion territory. Still, there are concerns as services business activity has been slowing. The July PMI slipped to 51.5, down from 53.7 in June and the estimate for July stands at 51.0, which would indicate very little growth. The silver lining from weak activity in manufacturing and services is that it points to a cooling UK economy which could provide support for the Bank of England to ease up on interest rate hikes.

Markets eye Jackson Hole symposium

Fed Chair Powell hosts the annual Jackson Hole Symposium which begins on Thursday. The Fed Chair’s speech is always a highlight, as investors will be looking for clues about the Fed’s future rate policy. Powell will be hoping not to make any waves and I expect a cautious, perhaps hawkish speech when Powell speaks on Friday. The future markets have priced in a pause at the Fed’s September meeting, but traders are divided over the November meeting and Powell’s remarks will be closely followed.

GBP/USD Daily Chart

GBP/USD Technical

  • There is support at 1.2714 and 1.2641
  • 1.2812 and 1.2885 are the next resistance lines

Source

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button

Become a Millionaire by Trading Crypto!