Skip to Content
News & Analysis at your fingertips.

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. See our updated Privacy Policy here.

Free Trading Guides
Please try again

Live Webinar Events


Economic Calendar Events


Notify me about

Live Webinar Events
Economic Calendar Events






More View More
GBPUSD Rallies After December Markit Manufacturing Data Hit a 30-Month High

GBPUSD Rallies After December Markit Manufacturing Data Hit a 30-Month High

Nick Cawley, Senior Strategist


Talking Points

- UK manufacturing surges in December on strong demand and new order growth.

- Data point to a +1.5% quarterly growth rate for UK in Q4'16.

- See the DailyFX Economic Calendar and see what live coverage for key event risk impacting FX markets is scheduled for the week on the DailyFX Webinar Calendar.

The British Pound rallied off its early lows after the December Markit Manufacturing PMI came in at 56.1, against expectations of 53.3 and a revised prior month reading of 53.6, driven by improved domestic and overseas demand and new order growth.

According to Rob Dobson, senior economist at IHS Markit, the rates of expansion in output and new orders were among the fastest seen during the survey’s 25-year history. “Based on its historical relationship against official manufacturing output data, the survey is signaling a quarterly pace of growth approaching 1.5%, a surprisingly robust pace given the lackluster start to the year and the uncertainty surrounding the EU referendum.”

The data also show that the boost to competitiveness from the weak exchange rate was the key driver of the recent turnaround and that higher inflation expectations remain a very real concern.

“On the prices front, higher input costs continued to feed through to increased selling prices, with rates of inflation remaining among the highest seen during the survey history. Of the companies citing a cause of higher costs, 75% linked the increase to the exchange rate,” according to Markit’s Dobson.

Chart 1: GBP/USD 5-minute Timeframe (Jauary 2 to 3, 2017)

The Markit UK services data will be released on Thursday January 5, with the market expecting a slight downturn to 54.7 from November’s 55.2.

--- Written by Nick Cawley, Analyst

To contact Nick, email him at

Don't trade FX but want to learn more? Read the DailyFX Trading Guides

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