British Pound Rallies after Best PMI Construction Since June 2010
THE TAKEAWAY: UK economy continuing to show signs of a more robust near-term turnaround > July PMI Construction report indicates strongest reading in over three-years > GBPUSD BULLISH
The string of better than expected UK economic data continued this morning with the release of the July PMI Construction report. The gauge printed its best level since June 2010 (58.4) at 57.0, easily besting the consensus forecast for a rise to 51.5 from 51.0. The UK is now two-for-two for the July PMI reports released, with the PMI Manufacturing report posting a strong beat yesterday as well.
While these data certainly suggest a faster recovery out of Britain, there still exists a great deal of uncertainty around the Bank of England’s next policy moves. In light of yesterday’s disappointing policy meeting, attention now turns to August 7, when the BoE will clarify its “forward guidance” intentions in context of the central bank’s inflation report.
GBPUSD 1-minute Chart: August 2, 2013
Charts Created using Marketscope – prepared by Christopher Vecchio
Following the report, the GBPUSD rallied from $1.5146 to as high as 1.5176, coming just short of achieving the daily high of 1.5179. Price had settled back to 1.5160 at the time this report was written, and with the July US NFP report due later today, gains by the GBPUSD are in question given the forecasted strength of the impending data releases.
--- Written by Christopher Vecchio, Currency Analyst
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