GBP/USD Slides on Weak Manufacturing PMI

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A third consecutive month of contraction was recorded in Britain’s manufacturing sector, according to the latest purchasing managers’ index. The figure dropped from 48.4 to 45.4 points, far worse than a score of 48.6 that was expected.

The acceleration in the contraction of this sector sent GBP/USD significantly lower: cable was trading close to 1.57 before the publication and it is now at around 1.5630.

According to the recent GDP release, the economy in the UK squeezed by 0.7% in Q2. It was partially blamed on bad weather and the jubilee celebrations. This fresh forward looking figure relating to Q3 shows that the slump probably continued, and that Britain is likely to complete a full year of recession.

The calendar is very busy for the pound, with more PMIs and the rate decision. See the GBP/USD forecast for all the details.

Also in the euro-zone, manufacturing contraction is accelerating fast with the overall figure standing at 44 points and German manufacturing standing even lower.

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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 the 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.