GBP/USD stays below 1.23 after UK Sept Manufacturing PMI rebounds to 48.3
The UK manufacturing sector activity contraction unexpectedly slowed in the month of September, the latest survey report from IHS Markit showed this Tuesday.
The seasonally adjusted IHS Markit/CIPS UK Purchasing Managers’ Index (PMI) jumped to four-month highs of 48.3 in September versus 47.0 expected and seven-year lows of 47.4 seen in August.
Key Points:
New orders, output and employment fall further
Purchasing and input stocks rise as Brexit preparations restart.
Rob Dobson, Director at IHS Markit, commented on the survey:
“The UK manufacturing downturn continued in September, adding to signs that the sector may be sliding into recession. Output, new orders and employment all fell further as rising political, trade and economic uncertainties exacerbated concerns about Brexit.”
“Some manufacturers noted increased inventory building activity in preparation for the forthcoming exit date, but the impact of such Brexit-related stock building was dwarfed by weakening demand for other customers, due in part to clients routing supply chains away from the UK.”
FX Implications:
A positive surprise in the UK Manufacturing sector activity data fails to lift the sentiment around the pound. The Cable keep its recovery from three-week lows of 1.2263 capped below the 1.2300 level on the data release.
The GBP markets remain confused after the UK PM Johnson brushed away criticism of leaked plans to manage the Irish border after Brexit. Also, markets refrain from placing any directional bet on the pound ahead of PM Johnson’s new Brexit plan announcement.
GBP/USD Levels to consider
Author
Dhwani Mehta
FXStreet
Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.
