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A Big Beat for UK Services PMI

Market Analysis

EURUSD, H1           

The UK services PMI beat forecasts and hit a 17-month high at 56.2 in the December reading. The median forecast had been for a decline to 54.9 after November’s 55.2. The breakdown showed employment growth rising at the quickest pace since January last year. All three of the December PMI surveys smashed expectations, lifting the composite reading to 56.7 from an upwardly revised 55.3 in November. Markit, the compiler of the PMI surveys, estimates that the data is consistent with 0.5% q/q growth in Q4.

Sterling reversed early morning declines and moved some 50 pips against the EUR, to 0.8530 before settling around 0.8540, short term support rests at 0.8530 and resistance at 0.8570. GBP remains north of 1.2300 against the USD and GBPJPY trades above 143.40 having being south of 142.50 earlier.

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Stuart Cowell

Market Analyst

HotForex

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