Britain’s construction sector almost came to a halt in September. Construction PMI disappointed and fell to 50.1 points, lower than 51.7 that was expected and lower than last month’s 52.6 points.
GBP/USD, that was already dropping prior to the release, now extends its falls and nears the 9 month lows reached a few weeks ago. End of the pound recovery?
A score of 50.1 is the lowest possible score in the growth zone – 50 points is the difference between growth and contraction. Up to now, this sector was relatively stable in recent and posted scores that reflected modest, yet sustainable growth.
GBP/USD is now under 1.54 following this publication. The pair was capped under 1.5480 after losing this line yesterday. Further support is at 1.5350, with the lows of 1.5325 providing extended support. Higher resistance is at 1.5530.
For more lines and events in this busy week, see the British pound forecast.
Yesterday’s manufacturing PMI came out better than expected, but included a worrying component: new exports, that fell to the lowest level in over two years. Tomorrow’s services sector PMI seals the series.
The pound has indirectly suffered from the euro-zone debt crisis – the run towards the US dollar has also affected the exchange rate of GBP/USD, in a negative way, although it wasn’t as strong as the sell offs in commodity currencies, and the euro of course.