Currency news

PMI activity in focus as GBP declines continue

Thanim Islam
Profile
Head of FX Analysis at Equals Money
-
3
min read
Publish date
23/04/24
  • GBP losses continue
  • Pill and PMI numbers to put further pressure on?


Recap

GBP losses from last Friday continued into the new week as markets continued to digest BoE Ramsden's dovish comments, although worth noting the currency did manage to reclaim some of the initial losses. Both USD and EUR were fairly flat on the day.

Today

Market rates


Currency pair Daily move* Indicative rate**
GBPAUD -0.58% 1.9162
GBPCAD -0.45% 1.6930
GBPCHF -0.09% 1.1253
GBPDKK -0.17% 8.6473
GBPEUR -0.17% 1.1590
GBPJPY -0.15% 190.9960
GBPNOK -0.13% 13.6107
GBPNZD -0.60% 2.0884
GBPSEK -0.36% 13.4668
GBPUSD -0.23% 1.2340

*Daily move - against G10 rates at 7:30am, 23.04.24

** Indicative rates - interbank rates at 7:30am, 23.04.24

Data points


Currency Event Period Consensus Previous
EUR HCOB Manufacturing PMI Apr 46.50 46.50
EUR HCOB Services PMI Apr 51.80 51.50
EUR HCOB Composite PMI Apr 50.70 50.30
GBP S&P Manufacturing PMI Apr 50.40 50.30
GBP S&P Services PMI Apr 53.00 53.10
GBP S&P Composite PMI Apr 52.60 52.80
USD S&P Manufacturing PMI Apr 52.00 51.90
USD S&P Services PMI Apr 52.00 51.70
USD S&P Composite PMI Apr 52.00 52.10

Speeches

  • None today.

Our thoughts

So much of the talk across our desks is of course focused on the weakness in GBP following the dovish turn from BoE speakers last week, as well as market pricing now reflecting a 60% chance of a June rate cut, and a 100% chance of a cut in August. We saw some key support levels taken out as well across the board, so the question now is whether there is enough conviction from markets for the negative GBP trend to continue. So, we wait to see what today's PMI numbers show, as well as what BoE Pill and Haskel say in the afternoon. From a charting perspective, the GBP index is looking oversold which normally suggests a rebound could be on the cards, but not guaranteed especially if the markets are in the mood for further GBP declines.

Chart of the day

PMI numbers today will give the markets a good idea about how economic activity is progressing this year. We can see in the chart below that activity in the UK and US has slowed since the turn of the year, whilst activity in the Europe has continued to improve. The EUR has managed to stay relatively strong, despite the ECB being priced to cut rates first. So should Europe's PMI numbers suggest that growth is slowing, then we could see another reason for the markets to weaken the EUR. As we know GBP has been hit recently on markets pricing an earlier rate cut from the BoE, so we will need to see an uplift in the UK numbers for the currency to garner support off monthly lows.

23042024 cotd
Source: Bloomberg Finance L.P.

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About the author
Thanim Islam
Profile
Head of FX Analysis at Equals Money

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