Loading..

Fundamental Summary

GBP

U.K manufacturing PMI for August was up from 46 to 47.3, above market expectations. Trading experts pay close attention to these surveys because purchasing managers frequently have early access to information regarding firm performance, which may be a leading predictor of economic growth. Moreover, U.K. Services Purchasing Managers' Index (PMI) surprised with a fall to a seasonally adjusted 52.5 in August from a 52.6 final in July. Analysts predicted that the reading would be 52.0 points. The 50-mark separates deterioration from improvement. Additionally, The Composite Purchasing Managers Index compiled by S&P Global fell to 50.9 from 52.1 in July, undervalued market expectations to 51.3. The Composite PMI Index measures the activity level of purchasing managers in both sectors.

USD

The BLS report on Friday shows figures that are worse than forecast. In August, total nonfarm payroll employment increased by 315,000, while the unemployment rate rose to 3.7%. A rate that is higher than expected should be interpreted as negative/bearish for the USD. Also, The Institute of Supply Management (ISM) Manufacturing Purchasing Managers Index (PMI) rose from 49.9 to 54.2 in August, exceeding market forecasts. The Manufacturing Purchasing Managers' Index (PMI) measures the activity level of purchasing managers in the manufacturing sector. Furthermore, according to payroll processor ADP, private sector hiring slowed in August due to a cooling of the labor market. As part of a revamped monthly report, the company said that private payrolls rose by 132,000 during the month, far below the consensus forecast of 300,000.

Our Opinion

Given the current balance of positive and negative influences affecting the GBP/USD and as long as the Fed maintains its aggressive policy and cyclical worries put pressure on risky assets, the fundamental outlook for the GBP is "BULLISH" and for the USD is "BEARISH"