UK Services PMI misses with 53.8 – GBP struggles

The services sector growth is slowing down according to Markit, with a score of only 53.8 points in November, below 55 expected. In fact, the score is back down to previous levels, showing that optimism in October was a one-off. The composite index is at 54.9 against 55.8 that was predicted. 

The pound is more attuned to the Brexit developments but still ticks down a few pips on the publication. It clearly suffers much more from yesterday’s failure to reach a deal.

Here are the recent moves on the 30-minute chart:

The third and last purchasing managers’ indicator is also the most important one: the services sector. Markit’s PMI was expected to tick down from 55.6 in October to 55.2 points in November.

GBP/USD bounced back from the lows ahead of the release, trading around 1.3410.

The construction PMI beat expectations and the manufacturing PMI was OK as well. However, the pound is much more vulnerable to the developments around the Brexit negotiations.

An agreement was already very close but the DUP derailed it. The question of the Irish border was almost resolved with a compromise stating a “regulatory alignment” but this was vetoed by the small northern Irish unionist party that backs May’s government. Further news out of London, Belfast, Dublin, and Brussels can continue shaking the pound.

More: Celebrating too soon? Sell opportunity on GBP/USD


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