GBP/USD stays below 1.34 after UK Final Manufacturing PMI beats estimates with 55.6 in Nov
|The UK manufacturing sector activity expanded more-than-expected in the month of November, the final report from IHS Markit confirmed on Tuesday.
The seasonally adjusted IHS Markit/CIPS UK Manufacturing Purchasing Managers’ Index (PMI) was revised higher to 55.6 in November versus 55.2 expected and 55.2 first readout.
Key points
Output growth accelerates.
'Brexit-buying' leads to higher purchasing, stocks and exports.
Rob Dobson, Director at IHS Markit, commented on the survey
“Growth of the UK manufacturing sector picked up in November, temporarily boosted by 'Brexit-buying' among clients and the ongoing boost from economies re-opening following lockdowns earlier in the year. The effects were strongest felt among firms supplying inputs to other companies as warehouses were restocked, and among producers of investment goods such as machinery and equipment.”
“The weak point was the consumer goods industry, which saw lower output and new order intakes amid depressed household sentiment caused by mounting job losses and the UK re-entering lockdown.”
GBP/USD reaction
The GBP bulls were unimpressed by the upward revision to the UK Final Manufacturing PMI, as mixed Brexit headlines weigh on the pound.
GBP/USD fades an uptick to three-month highs of 1.3406, currently trading at 1.3375, still up 0.41% on a daily basis.
The upside in the cable remains capped by the looming no-deal Brexit risks, as the UK and Europe fail to reach common ground on the three main sticking points, including fisheries and state aid.
The mixed headlines on Brexit from the UK Cabinet Minister Michel Gove and European Commission Chief Ursula von der Leyen weigh on the sentiment around the sterling. EU’s von der Leyen said: “We want a Brexit deal but not at any price.”
GBP/USD levels to watch
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