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

UK manufacturing PMI overview

The UK manufacturing PMI for August is due for release today at 0830GMT, and is expected to show that the pace of expansion in the activity eased last month, when compared to July’s solid rebound. The index is expected to arrive at 55.0 versus 55.1 booked in July.

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?

Technically, the pair remains on track for a test of yesterday’s low reached at 1.2853 levels, with the downside to extend on a bearish PMI report, opening doors for towards 1.2800, below which next targets lie at 1.2771 (8-week lows). In case of an upside surprise, the spot could head back towards 1.2950 barrier, beyond which doors open up for a test of 1.2982 (50-DMA) and 1.3000 (psychological resistance).

However, limited reaction is expected on the UK PMI release, as the main market moving today remains the US NFP data.

Key notes

GBP/USD Forecast: slim chances of breaking below 1.28 mark, UK PMI and NFP in focus

“The pair now seems to have entered a consolidation phase, just below mid-1.2900s as traders now look forward to the release of UK Markit manufacturing PMI, which is expected to come-in at 55.0 for August as compared to previous month's reading of 55.1,” Haresh writes.

About 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 UK. A result above 50 signals is bullish for the GBP, whereas a result below 50 is seen as bearish.