We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

Free Trading Guides
EUR/USD
Mixed
Oil - US Crude
Bearish
Wall Street
Bearish
Gold
Mixed
GBP/USD
Bullish
USD/JPY
Mixed
More View more
Real Time News
  • Indices Update: As of 16:00, these are your best and worst performers based on the London trading schedule: US 500: 0.29% Wall Street: 0.27% Germany 30: 0.08% FTSE 100: -0.00% France 40: -0.01% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/vHF9F2qb4Z
  • Happy Monday traders! What does the new month bring? Are we looking at positive sentiment but not much momentum❔ What are the market highlights heading into New York open? Find out from @DailyFX Chief Strategist, @JohnKicklighter 👇 https://t.co/xaHZXjZdZr
  • US Treasury Secretary Steven Mnuchin to hold call with G-7 finance ministers on Wednesday per his public schedule $DXY
  • Overlay that with google search terms for “protest” and “riots” and you see a similar uptick. Last time we saw a surge in these search terms was back in August 2019 and we saw a lot of volatility ensue shortly after. https://t.co/ZXAkgRWfAB
  • Forex Update: As of 14:00, these are your best and worst performers based on the London trading schedule: 🇦🇺AUD: 1.48% 🇳🇿NZD: 1.14% 🇨🇦CAD: 0.98% 🇯🇵JPY: 0.20% 🇪🇺EUR: 0.19% 🇨🇭CHF: 0.01% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/q8shAF6mG4
  • #IBEx35: a punto de romper el rango para situarse en los niveles previos a la crisis #trading https://t.co/H9DbLtpdox
  • Indices Update: As of 14:00, these are your best and worst performers based on the London trading schedule: Germany 30: 2.12% FTSE 100: 1.61% France 40: 1.56% Wall Street: 0.42% US 500: 0.37% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/M3rd9RjKa0
  • EUR/JPY Forecast: Euro vs JPY Price Flirts With 120.00 Threshold More details in the link: https://www.dailyfx.com/forex/technical/home/analysis/eur-jpy/2020/06/01/EURJPY-Forecast-Euro-vs-JPY-Price-Flirts-With-120.00-Threshold-MK.html?CHID=9&QPID=917714 https://t.co/Hh9ZAi5YX4
  • 🇲🇽 Markit Manufacturing PMI Actual: 38.3 Previous: 35 https://www.dailyfx.com/economic-calendar#2020-06-01
  • Commodities Update: As of 14:00, these are your best and worst performers based on the London trading schedule: Silver: 1.73% Gold: 0.30% Oil - US Crude: -0.96% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/yeKhOfigUX
GBP/USD Higher on Soft Markit/CIPS Services PMI, ‘Brexit’ in Focus

GBP/USD Higher on Soft Markit/CIPS Services PMI, ‘Brexit’ in Focus

2016-05-05 09:36:00
Oded Shimoni, Junior Currency Analyst
Share:

Talking Points:

- UK’s Markit/CIPS Services PMI at 52.3, below the 53.5 expected

- EU referendum has had a profound effect on the sector, Markit says

- British pound traded higher versus other majors after the news hit the wires

Showcase your trading skills against your peers in FXCM's $10,000 Monthly Challenge Here

The British Pound traded higher versus other major currencies (at the time this report was written) after today’s Markit/CIPS Services PMI fell in April. The diffusion index, by Markit Economics, printed 52.3 from the prior reading of 53.7. The number was below economists’ expectations of a 52.3 figure.

Markit/CIPS Composite PMI, which is a combined index of both services and manufacturing, decreased to 51.9 from the prior 53.6 print, and was below the expected 53.2 figure, after Tuesday’s Markit Manufacturing PMI came out weak. The data today also follows a fall in Construction PMI yesterday.

A number above 50 points to an expansion, below 50 to a contraction.

In Tuesday’s Manufacturing PMI report, Markit said that there is now greater pressure on the service sector to sustain GDP growth. After today’s report, Markit remarked that the PMI surveys are collectively indicating a nearstalling of economic growth in the UK, down from 0.4% in Q1 to just 0.1% in April.

The report emphasized ‘Brexit’ concerns as a prime factor contributing to the fall in the service sector, saying the looming referendum has had a profound effect, keeping prices relatively stagnant and delaying new orders.

Interestingly, Markit remarked that the low figures are in the territory which has in the past seen the Bank of England start to worry about the need to revive growth, either by cutting interest rates or through non-standard measures such as QE.

With that being said, the BoE commented in their latest monetary policy decision that 'Brexit' effects are likely to make macroeconomic and financial market indicators harder to interpret over the next few months, which will make the bank more cautious in interpreting data.

After Monday’s manufacturing figures saw a substantial decline in the GBP/USD, with the figure falling below the 50.0 level for the first time since 2013, the market may have anticipated a bigger miss coming into today’s services data release. It seems that the while the figures came below the initial anticipated figures, the market interpreted the data as sufficient to generate a positive response when the news came out, and the British Pound traded higher versus other majors.

The DailyFX Speculative Sentiment Index (SSI) reveals 50.4% of FXCM's GBP/USD traders are long this pair at the time of writing, implying a lack of directional conviction by the retail trading crowd.

You can find more info about the DailyFX SSI indicator here.

GBP/USD 5 Minute Chart: May 5, 2016

GBP/USD Higher on Soft Markit/CIPS Services PMI, ‘Brexit’ in Focus

--- Written by Oded Shimoni, DailyFX Research

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

DISCLOSURES

News & Analysis at your fingertips.