- The Pound Sterling briefly climbed above $1.290 after data revealed a strong expansion in UK private sector activity in July.
- Alongside, PMI data indicated a slight acceleration in service sector growth and the strongest manufacturing output since February 2022.
- These figures aligned with expectations as businesses reported increased confidence, employment, and new orders following the Labor Party’s landslide election victory.
- Despite this, there was no significant shift in the market’s expectations for a Bank of England interest rate cut, with the probability of a cut in August remaining around 40%.
According to electronic trading platforms, the yield on the British government bond for a period of 10 years rose slightly. Moreover, the yield on the British government bond for a period of 10 years reached around 4.135% after the positive data on private sector growth in July. Also, the PMI data pointed to a slight acceleration in service activity growth and the strongest manufacturing output since February 2022. The figures were in line with expectations, with firms reporting increased confidence, employment and new orders after Labor’s landslide election victory.
According to the Economic Calendar results, UK Manufacturing PMI is at a two-year high. The S&P Global Flash UK Manufacturing PMI was initially estimated to have risen to 51.8 in July 2024, its highest level since July 2022, from 50.9 in June and beating expectations of 51.1. Meanwhile, factory output rose by the most since February 2022 amid stronger order book volumes and efforts to reduce outstanding workloads. Job numbers also remained flat, ending a 21-month streak of declines.
On the price front, manufacturers faced the strongest rise in costs in a year and a half, as global shipping challenges linked to the Red Sea crisis led to higher transport bills. Meanwhile, business confidence has improved amid expectations of improved demand conditions, business investment, interest rate cuts and political stability.
Technical forecasts for the GBP/USD pair today:
The GBP/USD downtrend is getting stronger and breaking the 1.2800 support as per the daily chart below will increase the bears’ control over the trend. Technically, there will be no chance of a new upside move without moving towards the 1.3000 psychological resistance. Today, the GBP/USD will react to central bankers’ signals along with the announcement of US economic data results including GDP growth, weekly jobless claims and durable goods orders.
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