Pound Decline Temporarily Pauses on a Mix of PMI and Consumer Credit
THE TAKEAWAY: UK PMI for manufacturing rises to 48.3, disappoints expectations -> Net consumer credit beats expectations with a rise to 0.6 billion -> Cable trades steady before continuing decline
The Purchasing Managers’ Index for manufacturing was reported at 48.3 in March, disappointing expectations for 48.3, but higher than February’s 47.9 PMI. Manufacturers reported further declines in both production and new orders, according to Markit. Job losses were reported for the eighth straight month in March.
Also coming in worse than expected, UK mortgage approvals were reported at 51,700 for February, down from a revised 54.2K in January and disappointing expectations for 53.7K. However, UK Net Consumer Credit for February beat expectations for 0.4 billion, coming in at 0.6 billion Pounds.
The UK saw a 0.3% economic decline in Q4 of 2012 and is now one quarter away from a triple dip recession. Markit Senior Economist Rob Dobson said it is up to the services sector to prevent a continued recession. “These weak numbers may be sufficient to tip the balance and convince more members of the MPC to consider additional QE at their meeting next week,” said Dobson.
Although the Pound did not react immediately to any of the data listed above, GBP/USD continued a forty point decline shortly after and is now trading near the 1.5200 line. Support may continue to be provided at 1.5200, which may appear to some as the neck line of an inverse head and shoulders pattern. A broken support line around 1.5280 may now provide resistance.
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GBPUSD Daily: April 02, 2013
Chart created by Benjamin Spier using Marketscope 2.0
-- Written by Benjamin Spier, DailyFX Research. Feedback can be sent to firstname.lastname@example.org .
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