The purchasing managers’ index in the UK stands at 50.6 points in October, within growth territory (above 50 points). A marginal slide from 52.2 to 52 points was predicted. The lat time that this indicator was under 50 points was back in December 2010.
This figure adds to the notion that Q3 growth was only a one time event and that the UK economy isn’t that strong. GBP/USD traded around 1.60 before the release and is slipping towards 1.580. This weak figure in an important sector could weigh on cable even more later on.
Cable already lost the 1.60 line at the wake of the European session. Worrying news from Greece and especially Spain already pushed EUR/USD below the 1.28 line, and helped the dollar across the board.
Tomorrow, the UK will release the Manufacturing Production indicator. See how to trade this event with GBP/USD. Later this week, the Bank of England will decide on the interest rate and if to expand the QE program.
After a failure to breach 1.63, cable has leaned lower. For more, see the GBP/USD forecast.