Back
1 Apr 2014
GBP/USD remains in bearish territory following PMI disappointment
FXStreet (London) - GBP/USD remains in bearish territory following a weaker-than-expected UK manufacturing PMI.
PMI weaker despite increased new orders
While UK manufacturing production and new orders both continued to rise, the seasonally-adjusted Markit/CIPS Purchasing Manager’s Index declined to an eight-month low of 55.3 in March. Consensus expectations had been for a slight gain to 56.7, from February’s 56.2 print.
The decline was driven by a continued easing of price pressures continued as input costs fell and selling price inflation slowed to a seven-month low.
According to Markit, manufacturers continued to scale up production at during the latest survey period. Output has also risen throughout the 12 months, underpinned by rising levels of incoming new orders. However, rates of increase for output and new business cooled further from the highs registered during the second half of last year. The latest slowdowns were mainly centred on the investment goods sector, where rates of expansion eased markedly.
US PMI could disappoint
While the miss on expectations will help to drive bearish GBP/USD trading through a quiet session until the release of US PMIs at 12:58 GMT, there is little in the report to worry long-term UK bulls, with manufacturing slowing from its huge acceleration in the second half of 2013, rather than showing any real signs of declines.
Consensus expectations for US ISM manufacturing is for further gains to 54.0 in March from 53.2 in February. However, the weaker-than-expected Chicago PMI suggested that we may see some risks to the downside, reversing some of today’s GBP/USD bearishness.
GBP/USD is currently trading at USD1.6648, down 0.08 percent on the session.
PMI weaker despite increased new orders
While UK manufacturing production and new orders both continued to rise, the seasonally-adjusted Markit/CIPS Purchasing Manager’s Index declined to an eight-month low of 55.3 in March. Consensus expectations had been for a slight gain to 56.7, from February’s 56.2 print.
The decline was driven by a continued easing of price pressures continued as input costs fell and selling price inflation slowed to a seven-month low.
According to Markit, manufacturers continued to scale up production at during the latest survey period. Output has also risen throughout the 12 months, underpinned by rising levels of incoming new orders. However, rates of increase for output and new business cooled further from the highs registered during the second half of last year. The latest slowdowns were mainly centred on the investment goods sector, where rates of expansion eased markedly.
US PMI could disappoint
While the miss on expectations will help to drive bearish GBP/USD trading through a quiet session until the release of US PMIs at 12:58 GMT, there is little in the report to worry long-term UK bulls, with manufacturing slowing from its huge acceleration in the second half of 2013, rather than showing any real signs of declines.
Consensus expectations for US ISM manufacturing is for further gains to 54.0 in March from 53.2 in February. However, the weaker-than-expected Chicago PMI suggested that we may see some risks to the downside, reversing some of today’s GBP/USD bearishness.
GBP/USD is currently trading at USD1.6648, down 0.08 percent on the session.