Britain’s manufacturing sector is safeguarding the economy. Manufacturing PMI is a huge surprise – 62 points. This strong figure exceeded expectations and sends GBP/USD above 1.6110. The move continues.
Britain’s manufacturing PMI was expected to score 58 points, slightly lower than last month’s 58.3, which also came out better than expected. The whopping surprise of 62 points is a big miss for forecasters, which also didn’t see the negative GDP in Q4. 62 points is the highest level since 1992.
GBP/USD now trades at 1.6130, above the resistance line of 1.6110. Cable traded under 1.6080 in the hours before the release. The next significant hurdle is 1.63, followed by 1.6450. Below, 1.6110 turns into support, and it’s followed by 1.60.
Apart from manufacturing, the situation in Britain isn’t too good. According to the latest figures, the services and construction sectors are struggling – both PMI figures have fallen below the critical 50 point mark last month. This means economic contraction. We’ll get fresh purchasing managers’ indices for these sectors later in the week.
For more events and technical levels for the pound, see the GBP/USD forecast.
Other British releases were disappointing: Net Lending to Individuals dropped by 0.1 billion, falling short of expectations for a rise of 0.6 billion. Final Mortgage Approvals were 43K, also short of 47K initially reported. M4 Money Supply also dropped unexpectedly.
Together with rising inflation, the picture regarding a rate hike is quite mixed for Britain. The next meeting of the MPC, next Thursday, February 10th, will be closely watched, as the committee is split three ways at the moment.