British Pound Sinks on Soft UK Manufacturing PMI Report
- UK Manufacturing PMI fell to 56.7 in January from 57.2 in December
- British Pound Sold as Soft Data Weighs Against BOE Policy Outlook
- Spotlight Now Turns to This Week’s Bank of England Rate Decision
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UK Manufacturing PMI fell to 56.7 in January, down from December’s 57.2 and missing expectations calling for a print of 57.3. The outcome marked the lowest pace of factory-sector growth in three months. The British Pound fell against the US Dollar as the data crossed the wires, seemingly reflecting speculation that a softening UK economy means that the Bank of England could take more time to withdraw monetary stimulus than forex traders are currently estimating.
The central bank is due to deliver its monthly policy announcement later this week. According to DailyFX Currency Analyst David Song, the BOE is widely expected to normalize monetary policy ahead of schedule, but will look to the quarterly inflation report due out on February 12 for further policy cues. Strategist Ilya Spivak sees GBP/USD testing support at 1.6356 following a daily close below a key rising channel floor.
GBP/USD 1-Minute Chart. February 3, 2014
Charted created by David Maycotte using Marketscope 2.0.
-- Written by David Maycotte, DailyFX Research Team. Questions, comments or concerns can be sent to firstname.lastname@example.org.
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