Mind the Pound When UK Services Report Comes Out
The UK service sector is about to be released and it has a big impact on the GBP. Watch the headline number because it is very important,
The UK Services report is about to be released shortly and it’s likely to have a considerable impact on the British Pound. This is by far the most important sector since it accounts for about 80% of the British economy as we know.
But it will also be probably one of the most affected sectors by the Brexit process. Financial firms are worried, and we know that some of the big names are considering moving to mainland Europe as the process advances.
Although, at the moment this sector is in a decent shape after a period of weakness earlier this year. It stands at 55.6 PMI points right now, although it is expected to slip slightly lower to 55.2 points.
At the moment the Brexit process is in full swing. The officials from the Republic of Ireland are trying to team up with the DUP party of Northern Ireland which forms the majority of the British Parliament together with the Tories. The aim is a soft border between the north and the Republic of Ireland.
On the other hand, the Scottish leader Sturgeon is saying that “this is the time to push for the UK to remain in the single market,” meaning a soft Brexit.
GBP/USD has lost about 100 pips in the last few hours, so the services report and any other piece of economic data is second hand to forex traders now. So, if this report deviates from expectations and sends the GBP higher or lower, I will try to fade the move and reverse the trade. This is because the attention in the forex market will get back to Brexit. Thus, if GBP/USD jumps about 100 pips in the next few hours, I will open a sell forex signal up there, hoping the market will reverse.
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