GBP/USD reverses previous gains despite having a positive purchasing managers’ index for the manufacturing sector. British Manufacturing PMI surprised with a rise to 51.1 points, more than 48.9 that was expected. This figure was leaked ahead of schedule and triggered early rises. But on the other hand, new export orders fell to 45 points, the lowest in more than 2 years. The pound gained before the release and traded very nervously when the number was released. It is now on the fall.
The pound already climbed to to 1,5585 and dropped to support at 1.5480 around the release. This is quite unusual. Pound/dollar is gradually falling, getting close to 1.55.
The new exports component is a sensitive forward looking figure, and is seen as a sign of global slowdown.
The manufacturing sector in the UK already fell into contraction zone two months ago, when the score disappointed and fell to 49.4 points. This is below the critical 50 point line separating contraction and growth. In August, the index slid further. This rise in September is a positive sign and may delay the next round of QE.
GBP/USD started the week on a lower note, finding support at 1.5480 before bouncing back. 1.5530 is a line of struggle. Significant resistance appears at 1.5630. For more lines and events, see the GBP/USD forecast.
Purchasing managers’ indicators will be released tomorrow for the construction sector and on Wednesday for the services sector – the most important one.
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