Release Explanation: The activity level of Purchase Managers, they are surveyed on production, employment, inventories, orders, delivery data. The PMI is split into reads on Manufacturing, Service, and Construction industries. A read over 50 denotes growth. As an indicator of economic performance the PMI has the ability to easily affect currency valuations as Institutions re-align existing positions, or build new, on the strength of these reports.
Trade Desk Thoughts: In February, the U.K. Construction PMI fell to an all-time low, 27.8. This follows a sharp rise seen last month, when the index unexpectedly rose 5.2 points.
Almost every sub-index of the release points to a severe slowdown, as the British construction market has tumbled for more than a year. At this point, the housing market is experiencing the lack of credit and liquidity in the market, despite the huge rate cuts made by the BoE. Analysts say that the bottom in the construction sector is still far away.
Forex Technical Reaction: The pound had a weak response to the news release, moving only 10 pips. The pair is trading slightly above the neutral pivot point (1.4090), after gaining 90 pips overnight.