UK construction PMI collapses to 48.1 – GBP/USD slides

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Markit’s construction PMI points to a contraction in the construction sector: a score of 48.1 is the worst in over a year. Expectations stood at 51, after 51.1 last month.

GBP/USD is trading around 1.3250, erasing previous gains. The pair made an attempt to move higher, but it now slips back down.

This is the second out of three purchasing managers’ indicators. The previous one came yesterday, for the manufacturing sector. It was disappointing as well. The most important one is for the services sector, published tomorrow.

The Bank of England is still keen to raise rates in November, but it may be a “one-off”, only reversing the Brexit-induced rate cut of August 2016.

Further support awaits at 1.3230, followed by 1.3130. The pair has come a long way down from the highs of 1.3614. The move to the downside is also related to the strength of the greenback. The US dollar enjoys hopes for tax reform as well as good data.

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