GBP Falls as UK Manufacturing Misses Lofty Expectations
Sterling Talking Points
- GBP/USD turns lower after UK data misses on the downside but quickly recovers.
- UK manufacturing sector encouraging and resilient according to data provider.
The UK manufacturing sector missed market expectations Tuesday but remains resilient, according to data provider IHS Markit. The December Manufacturing PMI fell to 56.3 from a prior 58.2 and missed expectations of 57.9. GBP/USD turned lower on the release, but soon regained its poise against a weak dollar complex. The US Dollar basket (DXY) currently trades at its lowest level since September 18, 2017 after US consumer confidence fell to a three-month low in December.
GBPUSD Price Chart One Minute Timeframe (January 2, 2018)
According to Rob Dobson, Director at IHS Markit, which compiles the survey UK manufacturing ended 2017 on a positive footing. “Although growth of output and new orders moderated during December, rates of expansion remained comfortably above long-term trend rates. The sector has therefore broadly maintained its solid boost to broader economic expansion in the fourth quarter. The outlook is also reasonably bright, with over 50% of companies expecting production to be higher one year from now.”
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--- Written by Nick Cawley, Analyst
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.