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

The UK manufacturing PMI overview

The UK manufacturing PMI is due for release today at 0830GMT and is expected to show that the pace of expansion in the activity slowed further in September after August’s drop to 25-month lows. The index is expected to arrive at 52.5 versus 52.8 booked previously.

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?

At 1.3030, the pair looks set to break below the 1.3000 demand zone amid broad-based US dollar strength and looming Brexit uncertainty. Should the data show a bigger-than-expected drop, the spot could extend the losses to test the Sept 12 and 11 lows at 1.2980/70, below which the next support lies at 1.2952 (50-DMA).

However, on a positive surprise, the GBP/USD pair could rebound to 1.3071/80 (5 & 100-DMA), above which next target lies at 1.3100 (round number).

Key Notes

Market themes of the Day: New NAFTA and USD strength as Q1 begins

UK: Manufacturing PMI likely to decline to 52.4 in September - TDS

GBP/USD Forecast: Now seems vulnerable to test 1.29 handle, UK/US manufacturing PMI in focus

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