UK Services PMI At 53.4 – GBP/USD Pressured

There’s been another drop in UK business confidence in the services sector as PMI declines with a score of 53.4 in Markit’s services PMI. This is a slip from 53.8 points and within expectations of 53.5. New business growth is at a 9-month low. Job creation picks at a 14-month high. Optimism drops to the second-lowest since December 2011.

GBP/USD struggles to hold onto 1.29.

The third and last purchasing managers’ indicator for the US is the most important one: the services PMI. 79% of the UK economy services.

GBP/USD extended its decline, trading around 1.29, which serves as a line of support. Further support awaits at 1.2820, followed by 1.27. Resistance is at 1.2980 and 1.3050.

Earlier this week, the manufacturing PMI fell short with a score of only 54.3, a drop of 2 points. The construction PMI came out at 54.8 points, within expectations.

The pound has been shaken by the central bank and especially by the mood changes of Governor Mark Carney. Last week, the head of the BOE talked about the need to remove stimulus, eventually raising rates. However, only a week earlier, he clearly said “it is not appropriate to raise rates” at this time.

In the background, the pound is rocked by reports related to the Brexit talks. The British government is somewhat split between those supporting a soft Brexit, such as Chancellor Phillip Hammond, and the “hard Brexiteers”.

Here are the recent moves on the pound/dollar chart:

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Author: Travis Esquivel

Travis Esquivel is an engineer, passionate soccer player and full-time dad. He enjoys writing about innovation and technology from time to time.

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