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GBP Breaking News: Mixed UK PMI Data, Pound Bid but Not Out of the Woods


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GBP Breaking News: Mixed UK PMI Data, Pound Bid but Not Out of the Woods

Aug 23, 2022 | DailyFX
Warren Venketas, Analyst

POUND STERLING ANALYSIS & TALKING POINTS

  • UK PMI’s saw services data lift GBP/USD.
  • Hawkish Jackson Hole could add to pound woes.

GBP/USD FUNDAMENTAL BACKDROP

Input prices have soared globally and this is no different within the UK as manufacturers felt the pinch. Manufacturing PMI’s headed into contractionary territory for the first time since May 2020 but saw minimal downside reaction from GBP with services data marginally outperforming estimates. The reaction function from sterling makes logical sense as roughly 80% of UK GDP is generated from the services sector, hence cable finding some bids. This being said, the composite figure (50.9) remains marginally within the expansionary domain highlighting the declining state of the UK economy which does not bode well for the pound should this trajectory continue.

GBP/USD ECONOMIC CALENDAR

UK PMI data economic calendar

Source: DailyFX Economic Calendar

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