UK Services PMI at 53.7 – GBP frowns

The services sector  in the UK is growing at a faster pace in March: 53.7  points according to Markit’s PMI. This was more or less as expected and given the current market mood,  there may be a sigh of  relief.

However, this does not really cheer GBP/USD which remains only barely above the 1.42 level.

The UK services PMI was expected to rise from 52.7 points in February to 53.9 points in March.  A score  above 50 points reflects growth while a number under this level reflects contraction. The sector has already seen better days.

GBP/USD was on the back foot, trading just above 1.42. Support awaits at 1.4175 and resistance 1.4280.

The services  sector is the largest and most important sector in the UK. It tends to have the biggest impact. We already learned that the construction PMI came out at 54.2 points, as expected, and still reflecting growth. The manufacturing sector, which is the weakest link, is still in growth territory, but disappointed with 51 points in Friday’s release.

The pound is suffering from various problems: the fear of a “Brexit” is larger, especially after the Brussels bombings.

The mood in markets is negative, with falling stocks, falling oil and falling commodity currencies. The pound is trading alongside commodity currencies and losing out to the dollar and more so against the Japanese yen. USD/JPY is at the  lowest levels since 2014.