Why is the Pound up today when the UK economy is going down the … - Forex News by FX Leaders

Why is the Pound up today when the UK economy is going down the …

Posted Tuesday, August 2, 2016 by
Skerdian Meta • 1 min read

The construction sector has been the best performing sector of the UK economy. This sector bounced off right after the 2008 global financial crises. While it took a lot longer for the rest of the other sectors in the UK and in other countries (Japan is in recession and different sectors are still in contraction in certain countries of the Eurozone), the construction sector has been outstanding. Most of the time the PMI indicator has shown that this sector has been in the 55-60 point region which meant a nice expansion.

Today the number which shows the data collected in July was disappointing. The number was below 46 point which puts this sector for the second month in contraction. It is a terrible number but at least it came above expectations. That seems to have discouraged the GBP sellers and after an initial tumble, GBP/USD has jumped back up. This move has three reasons:

1 – The USD weakness which we have been seeing all day today across the board, is helping push this pair up

2 – The BOE (Bank of England) monthly meeting is coming up on Thursday so some trader might feel cold feet

3 – The GBP/USD bears which have been selling from 1.50 and 1.40 are feeling a bit itchy because the price is failing to make a substantial break below 1.30. So they are taking profit (closing) on some shorts (sell positions) and will probably look for better opportunities to sell higher.

Check out our free forex signals
Follow the top economic events on FX Leaders economic calendar
Trade better, discover more Forex Trading Strategies

About the author

Skerdian Meta // Lead Analyst
Skerdian Meta Lead Analyst. Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.
Related Articles
Comments

Leave a Reply

avatar
  Subscribe  
Notify of