Release Explanation: Measures 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,” TheLFB-Forex.com Trade Team notes.
TheLFB-Forex.com Trade Desk Thoughts: The U.K. Service PMI beat analysts’ expectations for a fifth consecutive month. However, the release still shows the service side of the economy has contracted for more than twelve consecutive months, but things are starting to look better.
The release number of 48.7 for the month of April suggests that the service side of the U.K. economy may return to growth in the following months, something that will certainly be reflected in the quarterly GDP data, TheLFB-Forex.com Trade Team added.
Forex Technical Reaction: The pound rose 40 pips during the news release, breaking above the neutral pivot point (1.5065) and at the same time above the Asian open price.