Forex News: UK Manufacturing Activity Stays Negative Despite Rise in Output
THE TAKEAWAY: UK PMI for manufacturing reported at 49.1 in November, better than expected -> Output rises for the first time in five months -> Sterling trading steady
UK manufacturing activity continued to stay negative for the 7th straight month, according to Markit’s purchasing managers’ index. The UK PMI was reported at 49.1 in November, beating expectations for 48.0, and the highest index result in 3 months. Any PMI below 50.0 indicates a decline in the sector’s activity.
Overall manufacturing production rose for the first time in five months in the UK, according to the PMI. However, this was partially due to the marked reduction in backlogs of work. Export demand continued to deteriorate, while the rate of job losses accelerated slightly.
Despite the slightly better than expected PMI, the Sterling did not significantly react to the better than expected release. GBPUSD is currently trading around 1.6050 following an earlier session rally, and resistance could now be provided at 1.6057, by the 76.4% retracement of the decline from April’s high to June’s low.