GBP/USD falls after worse than expected manufacturing figures

Arron Morris Currency Broker - GBP/USD falls after worse than expected manufacturing figuresWritten by
Arron Morris
Senior Currency Broker
T: 01442 892 065

The pound lost some of the ground it made on Friday after the UK posted worse than expected manufacturing PMI figures.

The latest PMI reading fell to 48.2 in July, down from 52.4 in June (a reading under 50 indicates contraction) and will surely fuel expectations the Bank of England will have to take some kind of action at their meeting on Thursday.

On the back of the manufacturing numbers the GBP/USD cross fell from $1.3238 to $1.3164, although the pound did manage to claw back some ground over the course of the day to close around $1.32.

GBP/USD exchange rate graph

GBP/USD exchange rate graph

Looking ahead, all eyes are firmly focused on the Bank of England announcement and following today’s data release, I would say it is now just a matter of what steps the central bank will actually take.

It would seem a 0.25% interest rate cut has now been priced into the market but if the BoE go beyond this by cutting rates by 0.5% and/or introducing a new stimulus programme then we could see the GBP/USD cross fall below $1.30.

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Arron Morris
Senior Currency Broker
T: 01442 892 065