The UK services PMI is a miss, falling to a 11-month low of 53.2 in the headline reading after 53.8 in July. How did the low UK August services PMI affect the Sterling?
5 September, HotForex – The median forecast had been for a more modest dip to 53.5. Survey respondents noted that subdued client demand and heightened uncertainty about the domestic economic outlook had weighed on business activity during August.
New orders rose at the second slowest pace since September last year, and some respondents in the sector reported delayed spending decisions among clients.
Brexit remains a confidence-damping factor
Despite this, job creation was at its strongest since early 2016, while input price inflation rose by the quickest pace in six months, with the blame falling on sterling’s weakness. Business confidence was at a three-month high, but remained subdued compared to levels seen prior to last year’s Brexit vote, and once again the uncertainties stemming from the process to leave the EU got a mention as being a confidence-damping factor.
How did the low UK August services PMI impact GBPUSD?
Furthermore, the composite PMI worked out at 54.0 in August, fractionally down on the 54.1 reading seen in July, and consistent with Q2 GDP growth of 0.3% q/q. Now, how did the 11 month low UK services PMI the Sterling? Despite, the Pound dipped on the headline, but the Sterling recovered to trade little changed.
GBPUSD trades at 1.2920 and pivots off 1.2910, meanwhile EURGBP sank to 0.9178 before recovering to 0.9195.
This article about UK August services PMI and GBPUSD analysis was written by Stuart Cowell, Senior Market Analyst at HotForex. The provided article is a general marketing communication for information purposes only. It does not constitute an independent investment research. Nothing in this communication contains an investment advice or an investment recommendation. It also does not contain a solicitation for the purpose of buying or selling of any financial instrument.
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