Talking Points:

  • UK Services PMI 57.6 vs. Estimated 58.2 in February
  • British Pound Falls vs U.S. Dollar After Data Crossed the Wires
  • Spotlight Turns to Next Week’s Bank of England Rate Meeting

Economic Event

Actual

Expected

Prior

Markit/CIPS UK Services PMI (MAR)

57.6

58.2

58.2

Markit/CIPS UK Composite PMI (MAR)

57.6

58.1

58.2

UK Services PMI gauge slipped to 57.6 in March, and missing estimates calling for a print of 58.2. The pace of expansion in sector-sector activity fell for the sixth consecutive month and to a 9 month low. Data out of the UK has disappointed and is unflattering for interest rate expectations. This past session Markit’s construction PMI survey for March reported unexpected contraction in factory-sector activity. The consistent round of disappointing data may pressure the sterling lower as it may reflect traders’ easing their bets for an early rate hike.

The British Pound fell against the U.S. Dollar as the data crossed the wires. Currency Strategist Ilya Spivak says the British Pound may be carving a top below 1.67 figure against the US Dollar. On a similar note, Market Analyst Dave de Ferranti notes that the 1.6670 mark has put a break on the pound rally.

Pound-Slips-Following-Worse-Than-Expected-UK-PMI-Data_body_Chart_2.png, Pound Slips Following Worse-Than-Expected UK PMI Data

GBP/USD 5-Minute Chart. April 3, 2014

Pound-Slips-Following-Worse-Than-Expected-UK-PMI-Data_body_Picture_1.png, Pound Slips Following Worse-Than-Expected UK PMI Data

Charted created by David Maycotte using FXCM’sMarketscope 2.0.

-- Written by David Maycotte, DailyFX Research Team. Questions, comments or concerns can be sent to dmaycotte@FXCM.com.

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