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02/07/24
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GBP Flat, Focus on Powell Speech
On Tuesday, the British pound showed limited movement, and GBP/USD traded at about 1.2681, up 0.25% for the day in the North American session.
There are no events out of the UK today, while Federal Reserve Chair Powell will speak at the ECB forum in Portugal and the US will release Jolts Job Openings.
The Purchasing Managers’ Indices (PMIs) give a snapshot of key industries’ health and the picture in the UK is not pretty. The manufacturing sector is starting to emerge from a prolonged decline of nearly 2 years.
The Manufacturing PMI crept into expansion territory and the June reading of 50.9 today indicated stagnation. This was less than May’s reading of 51.2 and lower than the market consensus of 51.4.
The services sector has been carrying the economy in the UK and although it is growing, it is slowing. The Services PMI will be released on Wednesday, and in May dropped to 55.2 from 55.0. It is expected to fall to 51.2 for June.
Business confidence is still weak and there is increased uncertainty before the UK election on July 4.
The Construction PMI in May rose to 54.7, higher than expected and the highest level since May 2022. The report for June is due to be released on Thursday and will likely ease to 53.6.
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