UK manufacturing PMI falls to 55.4 – GBP/USD follows

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A big disappointment from the UK: manufacturing PMI for July dropped to 55.4 points. This is the lowest in a long time, even though it still reflects solid growth. The purchasing managers’ index for the manufacturing sector was expected to tick down from 57.5 to 57.2 points, still reflecting strong growth in this sector. Last month’s figure was revised to the downside: 57.2 points.

GBP/USD traded on low ground towards the publication, at around 1.6870. In the immediate aftermath, the pair falls to 1.6840.  — more coming

Pound/dollar is doing quite a large scale U-turn after peaking at nearly 1.72. Is this already more than a correction? Is this a total change of direction?

GBPUSD Falling August 1 2014 on manufacturing PMI pound dollar daily chart

This is the first of a series of purchasing managers’ indices released in the UK. In recent months, they had a much more significant impact on the euro than the rate decisions, also held early in the month.

US dollar strength has been a prominent feature this week. The market seemed to like positive data like the excellent 4% GDP growth for Q2 (preliminary and annualized) and shrugged off the not-too-hawkish statement from the Fed.

The big event today is of course the Non-Farm Payrolls.

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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 a 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.

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