When is the UK manufacturing PMI and how could it affect GBP/USD?
|The UK manufacturing PMI overview
The UK manufacturing PMI is due for release today at 0830GMT and is expected to show that the pace of expansion in the activity slowed down further in May after reaching two-month lows in April. The index is expected to arrive at 52.4 versus 53.1 booked previously.
Deviation impact on GBP/USD
Readers can find FX Street's proprietary deviation impact map of the event below. As observed the reaction is likely to remain confined between 10 and 50 pips in deviations up to 1.65 to -2.50, although in some cases, if notable enough, a deviation can fuel movements of up to 80 pips.
How could affect GBP/USD?
At 1.2640, the pair looks to extends the bounce above the key 1.2655/60 confluence, as the markets eagerly await the UK data for fresh trading impetus.
Should the data show a bigger-than-expected drop, the spot could change its course and fall back to the 1.2600 round number, below which 1.2558 (4-month lows) could be targeted, as the Brexit uncertainty looms.
However, on a positive surprise, the GBP/USD pair could accelerate the renewed upside to 1.2673 (May 29 high), above which 1.2700 (round number) could be tested en route 1.2755/56 (intermittent tops).
Key Notes
UK manufacturing PMI: Upside risks to May's figure - TDS
GBP/USD downside bias still persists – UOB
GBP/USD forecast: Not out of the woods yet, UK/US manufacturing PMI eyed for some impetus
About the UK manufacturing PMI
The Manufacturing Purchasing Managers Index (PMI) released by both the Chartered Institute of Purchasing & Supply and the Markit Economics captures business conditions in the manufacturing sector. As the manufacturing sector dominates a large part of total GDP, the Manufacturing PMI is an important indicator of business conditions and the overall economic condition in the UK. A result above 50 signals is bullish for the GBP, whereas a result below 50 is seen as bearish.
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