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British Pound Rises on Highest Markit PMI in Over a Year

British Pound Rises on Highest Markit PMI in Over a Year

Oded Shimoni, Junior Currency Analyst


Talking Points:

  • UK’s Markit PMI printed 55.5, above the 51.3 expected
  • Fastest manufacturing growth in 16 months
  • The data can possibly fuel perception that the UK’s economy is closer to a rate increase

The British Pound rose 0.28 percent versus the US Dollar after today’s Markit PMI printed a seasonally adjusted 55.5, above the 51.3 reading expected by economists, and above the revised prior reading of 51.8 in September. The number marked the best month of output growth since June 2014. A number above 50 points to an expansion.

Markit remarked that October saw solid improvements in growth rates of output and new orders, with the index of new orders rising to 56.9 versus the 52.9 prior reading, which is a 15 months high. Markit said that the revival of overseas exports was the main reason for the expansion, and that this is a very encouraging fact due to fears that global demand is slumping. On the other hand, Markit commented that price pressures remained on the downside.

The BOE’s will announce its next interest-rate decision this Thursday. The latest Markit PMI might bode well for renewed speculation on an earlier rate hike than previously expected.

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.