Pound Tracks Manufacturing PMI, Crude on High

Pound Tracks Manufacturing PMI, Crude on High

Pound tracks manufacturing PMI, while crude moves higher on Wednesday following UK big economic releases. Let’s take a look at the figures!

Manufacturing production represents about 80% of the UK’s total industrial production. According to the Office for National Statistics, the country’s manufacturing PMI came in at 0.4% m/m in November, against a 0.3% consensus (revised upward from a humble 0.1%).

At the same time, the total industrial production grew by 0.4%, compared to 0.2% and October’s print (0.0%).

On an annualised basis, the UK manufacturing PMI arrived at 3.5% in November, bettering consensus. Overall, the UK’s industrial production rose 2.5% in November, beating the expected 1.8%.

Pound Moves Before and After the Manufacturing PMI

Ahead of the manufacturing PMI release, the Pound posed a positive stance, moving up against the dollar. Following a daily open at 1.35529, GBPUSD saw consolidation a little bit below recent highs at 1.35176.

After the release, what used to be only a potential slip turned to reality, with the cable moving down and the perspective of retracement beginning to take shape. Despite the upbeat data release, the Pound moved even lower against the US dollar, breaking below S1 at 1.3519.

Now, the GBPUSD pair seems to have picked up pace, as investors are digesting the upbeat manufacturing PMI data, trading at 1.35484, eyeing S2 at 1.35498.

However, there’s always a positive and a negative side to every fact… Despite the positive manufacturing PMI, the UK trade balance data showed a deficit of GBP 12.23 billion in November, above the expected GBP 10.70 billion. This, as well as the long-debated and imminent Brexit, may tighten the collar around the Pound’s neck and hurt the UK economy in the long term,  analysts suggest.

Crude on High

Wednesday is a big day for crude oil too! Ahead of the crude oil inventories, crude moved higher on the charts today, with US crude futures hitting 3-year highs. The uptrend in US oil prices can be linked to a tight supply balance due to the OPEC-driven cuts in output and a steeper decline in US crude inventories.

American Petroleum Institute (API)’s report shows that crude oil inventories decreased by 11.2 million barrels in the week ending January 5, to 416.6 million. This number exceeded by far analysts’ estimations, which were hovering above 3.9 million barrels.

Sensitive to the numbers, WTI crude added a few $s, starting the day at $ 63.44, while Brent crude traded at $ 69.17.

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