Growth in the UK services sector is slowing down, with the services PMI standing at only 55.6 points, significantly below expectations. This is the lowest reading since May 2013.
GBP/USD slipped all the way to 1.5235 before bouncing.
The composite PMI stands at 55.1 points, also below initial predictions. Nevertheless, this implies GDP growth of 0.7% according to Markit, which is quite good and matches the figure for Q2.
The purchasing managers’ index for the services sector in the UK was expected to stand at 57.6 points in August, a tick up from 57.4 in July. The services sector is the largest one in the UK and the publication has the largest impact.
The pound has certainly been on the back foot towards the publication with GBP/USD dipping to a low of 1.5255.
So far, the manufacturing PMI disappointed and construction was OK. With services being the largest and most important one, this is what markets are eyeing and they weren’t optimistic before the release.
The focus now shifts the to the European Central Bank. ECB Preivew: Draghi to join currency wars? 4 scenarios
