A big disappointment from the UK: manufacturing PMI for July dropped to 55.4 points. This is the lowest in a long time, even though it still reflects solid growth. The purchasing managers’ index for the manufacturing sector was expected to tick down from 57.5 to 57.2 points, still reflecting strong growth in this sector. Last month’s figure was revised to the downside: 57.2 points.
GBP/USD traded on low ground towards the publication, at around 1.6870. In the immediate aftermath, the pair falls to 1.6840. — more coming
Pound/dollar is doing quite a large scale U-turn after peaking at nearly 1.72. Is this already more than a correction? Is this a total change of direction?
This is the first of a series of purchasing managers’ indices released in the UK. In recent months, they had a much more significant impact on the euro than the rate decisions, also held early in the month.
US dollar strength has been a prominent feature this week. The market seemed to like positive data like the excellent 4% GDP growth for Q2 (preliminary and annualized) and shrugged off the not-too-hawkish statement from the Fed.
The big event today is of course the Non-Farm Payrolls.
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