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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 sixth consecutive month. The release points out that the service side of the economy expanded for the first time in more than a year, after contracting at a strong pace.
This release will certainly be reflected in the quarterly GDP data, since the service side of the economy makes up the biggest part of the U.K. economy. Additionally, the pound and the U.K. stock market will be helped by this report in the medium term, TheLFB-Forex.com Trade Team added.
Forex Technical Reaction: Despite the better than expected release, the pound plunged 50 pips during the news release, in-line with the other major currencies. Earlier, during the European session, the pound reached the highest value since late November.
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