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  • UK Final Services PMI revised down to 56.5 in July.
  • GBP/USD bounces-off lows but remains below 1.3100.
  • Broad USD remains unabated, focus shifts to US data.

The UK services sector activity expanded less-than-expected in July, the final report from IHS Markit showed this Wednesday. 

The seasonally adjusted IHS Markit/CIPS UK Services Purchasing Managers’ Index (PMI) was revised lower to 56.5 in July versus 56.6 expected and a 56.6 – July’s first reading.

Key points

Headline index reaches 56.5, up sharply from 47.1 in June.

New work returns to growth in July amid reopening boost.

Business optimism improves for the fourth month in a row.

Tim Moore, Economic Director at IHS Markit, which compiles the survey

“UK service providers are starting to see light at the end of the tunnel after a record slump in business activity during the second quarter of 2020. July data revealed the fastest increase in business activity for five years, which adds to signs of recovery across the manufacturing sector this summer.”

“Higher levels of service sector output were almost exclusively linked to the reopening of the UK economy after lockdown measures and the subsequent return to work of employees and clients. However, these are still the very early stages of recovery and survey respondents often commented on achieving growth from an exceptionally low base.”

FX implications

The GBP bulls shrugs-off the downward revision to the UK Services PMI for July, as GBP/USD bounces-off 1.3058 low to now trade near 1.3070 region, adding 0.08% on the day.

more to come …