When is the UK Manufacturing PMI and how could it affect GBP/USD?

The UK Manufacturing PMI overview

The UK Manufacturing PMI is due for release today at 0830GMT and is expected to show that the pace of contraction in the activity slowed in August after reaching six-and-half-year lows in July. The index is expected to arrive at 48.4 versus 48.0 booked previously.

Deviation impact on GBP/USD

Readers can find FX Street's proprietary deviation impact map of the event below. As observed the reaction is likely to remain confined between 10 and 50 pips in deviations up to 1.65 to -2.50, although in some cases, if notable enough, a deviation can fuel movements of up to 80 pips.

How could affect GBP/USD?

Having faded a spike to 1.2176 highs, the pair finds support ahead of the 1.2150 level once again, with the focus now shifting to the UK data and Brexit developments for fresh trading impetus.

Should the data suggest a deeper contraction, the spot is likely to meet fresh supply, drowning the spot further towards 1.2108/00 (Aug 22 low/ round number), below which 1.2074/65 (Aug 16 and 20 lows) could be targeted.

However, on an upbeat figure, the GBP/USD pair bounce-back towards 1.2204 (10-DMA), above which 1.2226 (Aug 30 high) could be tested en route 1.2250 (psychological level).

Key Notes

UK Manufacturing PMI seen lower at 47.5 in August – TD Securities

UK’s Williamson: PM Boris Johnson is not considering calling an election - ITV

Forex Today: New US-Sino tariffs kick in and Brexit battle reaches new highs

About the UK Manufacturing PMI

The Manufacturing Purchasing Managers Index (PMI) released by both the Chartered Institute of Purchasing & Supply and the Markit Economics captures business conditions in the manufacturing sector. As the manufacturing sector dominates a large part of total GDP, the Manufacturing PMI is an important indicator of business conditions and the overall economic condition in the UK. A result above 50 signals is bullish for the GBP, whereas a result below 50 is seen as bearish.