In June, the seasonally adjusted S&P Global/CIPS UK Manufacturing Purchasing Managers’ Index (PMI) increased to 51.4, surpassing the market consensus of 51.3. This increase in manufacturing PMI was a positive sign for the UK economy. However, the Preliminary UK Services Business Activity Index declined to 51.2 in June, missing the market consensus of 53.0. This unexpected decline in services PMI indicated a slowing pace of economic growth in the UK. According to Chief Business Economist Chris Williamson, the flash PMI survey data for June suggested that GDP was growing at a sluggish rate of just over 0.1%.
The slowdown in economic growth reflected uncertainty around the business environment leading up to the general election. Many firms were hesitant to make decisions until there was clarity on various policies. This uncertainty impacted the overall pace of economic growth in the UK. In the forex market, GBP/USD remained on the back foot near 1.2650 after the release of mixed UK PMI data. The pair was trading flat on the day, showing little reaction to the news. The fluctuating PMI data had some implications on the GBP/USD exchange rate, but the impact was not significant.
The table below showed the percentage change of the British Pound against major currencies on that day. The British Pound was the strongest against the Euro. The heat map displayed percentage changes of major currencies against each other, providing a visual representation of the fluctuations in exchange rates. It was important for investors and traders to keep track of these changes to make informed decisions in the forex market. Understanding how different currencies were performing against each other could help in predicting future market trends and making profitable trades.
Overall, the mixed UK PMI data for June had a slight impact on the GBP/USD exchange rate, which remained relatively unchanged. The increase in manufacturing PMI was a positive sign for the UK economy, while the decline in services PMI indicated a slowing pace of growth. The uncertainty surrounding the general election and its impact on business decision-making contributed to the sluggish rate of economic growth. Traders and investors should continue to monitor economic indicators and market trends to navigate the forex market successfully. By staying informed and adapting to changing conditions, they can make well-informed trading decisions and maximize their gains in the market.
