When is the UK manufacturing PMI and how could it affect GBP/USD?

The UK manufacturing PMI overview

The UK manufacturing PMI is due for release today at 0830GMT and is expected to show that the pace of expansion in the activity continued to slow down in July after June’s positive surprise. The index is expected to arrive at 54.2 versus 54.4 booked previously.

Deviation impact on GBP/USD

Readers can find FX Street's proprietary deviation impact map of the event below. As observed the reaction is likely to remain confined between 10 and 50 pips in deviations up to 1.65 to -2.50, although in some cases, if notable enough, a deviation can fuel movements of up to 80 pips.

How could affect GBP/USD?

At 1.3110, the pair looks to extend the recovery towards the 1.3130-50 supply zone amid reports that the UK Finance Ministers is seeking another round of spending cuts. Should the data show a bigger-than-expected drop, the spot could breach the strong support near 1.3080 region, below which a test of 1.3000 (round number) becomes imminent.

However, on a positive surprise, the GBP/USD pair make an attempt to retest 1.3173 (July 31 high), above which next target lies at 1.3222 (50-DMA).

Key Notes

FOMC and global manufacturing PMIs in focus today – Danske Bank

UK: Manufacturing PMI likely to edge higher to 54.6 in July - TDS

GBP/USD Forecast: Ranging around 1.3100 ahead of BoE, US data/Fed eyed for some impetus

About the UK manufacturing PMI

The Manufacturing Purchasing Managers Index (PMI) released by both the Chartered Institute of Purchasing & Supply and the Markit Economics captures business conditions in the manufacturing sector. As the manufacturing sector dominates a large part of total GDP, the Manufacturing PMI is an important indicator of business conditions and the overall economic condition in the UK. A result above 50 signals is bullish for the GBP, whereas a result below 50 is seen as bearish.