Overview of British PMI
The first preliminary readings of UK manufacturing and service PMIs for May are due to be released today at 08:30 GMT.
The preliminary British manufacturing PMI should show that the contraction in manufacturing activity eased somewhat in May. The index should reach 36.0 against 32.6 last.
At the same time, the British PMI for British services should rise to 25.0 in May against 13.4 booked in April.
How could they affect GBP / USD?
The cable extends the break below the 1.2200 level, down 0.40% so far. The downside disadvantage can be mainly attributed to the position of the Governor of the Bank of England (BOE) Andrew Bailey on negative interest rates.
Meanwhile, safe haven demand for the US dollar is on the rise across the board amid escalating Sino-US tensions, adding to losses in GBP / USD. The immediate focus now remains on PMI versions of UK manufacturing and services.
FXStreet analyst Haresh Menghani offers key technical levels for GBP / USD trading in the coming day.
“Some consecutive weakness below the 1.2180-75 region will strengthen the negative outlook and make the pair vulnerable to further accelerate the several-week low to 1.2100 figure near the 1.2075 region. A convincing breakthrough could be seen as a new trigger for bearish traders and set the stage for a further short-term depreciation movement towards questioning the key psychological rating of 1.2000. ”
“On the other hand, any significant positive return above the 1.2200 mark now seems to confront a new offer near the horizontal level 1.2260 and seems more likely to remain capped in front of the 1.2300 mark,” adds Haresh.
GBP / USD at 1.2100 / 1.2400 over the next few weeks – UOB
Risk extinguished as Sino-US tensions rise, PMI and unemployment claims in the United States
GBP hit as BOE thinks about negative rates
About British PMI
The Manufacturing Purchasing Managers’ Index (PMI) published by the two Approved Institute for Purchasing and Supply and the Markit Economics captures trading conditions in the manufacturing sector. As the manufacturing sector dominates a large part of total GDP, the manufacturing PMI is an important indicator of economic conditions and the overall economic situation in the United Kingdom. A result above 50 signals is bullish for the GBP, while a result below 50 is considered bearish.
The PMI service published by both the Approved Institute for Purchasing and Supply and the Markit Economics is an indicator of the economic situation in the UK service sector. It captures an overview of the condition of sales and employment. It should be noted that the UK services sector does not influence GDP either positively or negatively as much as the manufacturing PMI.