UK Services PMI Rises To 54.2 – GBP/USD Unimpressed

The British services sector is growing at a slightly stronger pace: a score of 54.2 points. It is marginally higher than expected. A separate release showed that mortgage approvals also beat with 65,139 while M4 Money Supply missed by rising only 0.1%. Net lending to individuals met expectations with 4.9 points.

Pound/dollar is not really impressed, ticking up by some 5 pips. All in all, the pound is slightly higher within the range.

Markit’s third and last purchasing managers’ indicator is the most important one: for the large services sector. A score of 54.1 points was expected for December, a bit higher than 53.8 that was seen in November. The UK also releases other figures: net lending to individuals was expected to rise from 4.8 to 4.9 billion, money supply was predicted to rise by 0.4% and mortgage approvals to slip from 65K to 64K.

GBP/USD was trading around 1.3540 ahead of the publication, slightly higher on the day.

The two previous PMIs fell short of expectations: manufacturing slipped from the highs to 56.3 points and construction dropped slightly to 52.2. Any score above 50 represents expansion, but there is a big difference between 52 points which is modest growth and 58 which is solid growth.

The US dollar made an attempt to recover riding on a better than expected manufacturing PMI in the US. The initial reaction to the Fed meeting minutes was also positive for the dollar. The document showed a split committee and that was good enough for the greenback. However, later on, these gains faded away.

Resistance awaits at 1.3550, followed by 1.3615. Support awaits at 1.3460.