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UK services PMI only 55.6 – GBP/USD dips

Growth in the UK services sector is slowing down, with the services PMI standing at only 55.6 points, significantly below expectations. This is the lowest reading since  May 2013.

GBP/USD slipped all the way to 1.5235 before bouncing.

The composite PMI stands at 55.1 points, also below initial predictions. Nevertheless, this implies GDP growth of 0.7% according to Markit, which is  quite good and matches  the figure for Q2.

The purchasing managers’ index for the services sector in the UK was expected to stand at 57.6 points in August, a tick up from 57.4 in July. The services sector is the largest one in the UK and the publication has the largest impact.

The pound has certainly been on the back foot towards the publication with GBP/USD dipping to a low of 1.5255.

So far, the manufacturing PMI disappointed and construction was OK. With  services being the  largest and most important one, this is what markets are eyeing and they weren’t optimistic before the release.

The focus now shifts the to the European Central Bank.  ECB Preivew: Draghi to join currency wars? 4 scenarios

Yohay Elam

Yohay Elam

Yohay Elam: Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I've accumulated. After taking a short course about forex. Like many forex traders, I've earned a significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I've worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts.