The UK construction sector continues recovering, with a score of 53.1 points in Markit’s construction PMI. This is significantly better than expected and points to stronger growth in this sector.
GBP/USD is stable at 1.3440. It seems to be waiting for news from Brussels. Brexit negotiations are becoming intense (see details below the chart).
Here is how the move looks on the 30-minute chart. There are clearly bigger events in play:
The UK construction purchasing managers’ index was expected to extend its recovery and rise to 51.2 points in November from 50.8 points. Last week’s manufacturing PMI slightly beat expectations. Tomorrow we will get the services PMI which is the most important one.
GBP/USD was trading around 1.3440 ahead of the publication. The pair was pushed lower due to general USD strength. The greenback enjoyed the passage of a tax cuts bill in the Senate and seems to ignore the Trump troubles.
For the pound, today is an important day of top-level Brexit negotiations. There have been talks over the weekend about the open issue of the Irish border. The divorce bill and EU citizens rights are also on the agenda. The EU demands to see “sufficient progress” on these topics ahead of talking about future relations. However, it is hard to see an agreement on the border (or lack thereof) in Ireland without knowing about future arrangements: will the UK remain in the customs union or not?
Last week, there have been mixed reports about progress ahead of today’s self-imposed deadline. Knowing the euro-zone machinations around the Greek crisis, the deadline can be pushed back.
More: Brexit: Irish border is far from a done deal – will GBP fall?