GBP/USD stays below 1.34 despite UK Preliminary Manufacturing PMI posting an unexpected rise

The seasonally adjusted IHS Markit/CIPS UK Manufacturing Purchasing Managers’ Index (PMI) unexpectedly improved to 58.2 in November versus 57.3 expected and 57.8 – October’s final reading.

Meanwhile, the Preliminary UK Services Business Activity Index for November surprised positively, arriving at 58.6 versus October’s final readout of 59.1 and 58.5 expected.

Chris Williamson, Chief Business Economist at IHS Markit, commented on the survey

“A combination of sustained buoyant business growth, further job market gains and record inflationary pressures gives a green light for interest rates to rise in December.”

“Output growth across manufacturing and services came in slightly faster than expected in November, albeit heavily skewed towards the service sector as factories continued to struggle with supply shortages and falling exports.”

“Encouragingly, an acceleration in growth of new business hints that December should bring a strong end to the year, meaning the fourth quarter should see a welcome pick up in GDP growth after the slowdown seen in the third quarter.”

FX implications

Upside surprise in the UK Preliminary Manufacturing and Services PMIs failed to impress GBP bulls, as the GBP/USD pair kept its range around 1.3380, where it now wavers.

The spot is lower by 0.07% on the day.

GBP/USD technical levels