Pound Sees a Delayed Rally on a PMI Services Beat
- UK services PMI sets a new 6-year high
- New business orders grew at strongest pace in 16-years
- Pound sees a delayed rally
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The UK Purchasing Managers’ Index for services surprised expectations and set a new 6-year high in August, according to Markit. The UK PMI was reported at 60.5, better than expectations for a 59.7 index result and above the 60.2 PMI reported in July. The 60.5 PMI result is well above the neutral 50.0 level and indicates even faster expanding service sector activity.
Markit reported that new business growth in the UK service sector was the strongest in over 16 years. However, employment broadly stagnated due to an inability to hire new workers. The PMI for manufacturing set a new 2.5 year high in August.
“With sister surveys for construction and manufacturing also signaling the continuation of substantial growth, the UK is well on course to register a strengthening of GDP growth over Q3 as a whole following the 0.7% increase in Q2,” said Markit Senior Economist Paul Smith.
Although the Pound did not immediately react to the better than expected PMI, Sterling slowly rose about 30 pips and above 1.5600 against the US Dollar, between the release and the time of this writing. The 1.5600 level may now provide support for GBP/USD, and resistance may be seen at a 6-month high at 1.5751.
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GBPUSD Daily: September 4, 2013
Chart created by Benjamin Spier using Marketscope 2.0
-- Written by Benjamin Spier, DailyFX Research. Feedback can be sent to email@example.com .
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.