GBP/USD Drops Near 1.3400 After Mixed UK Economic Data
The British pound fell close to 1.3400 against the U.S. dollar on Thursday, after fresh economic data from the UK showed a mixed picture. Traders reacted quickly, leading to selling pressure on the pound.
The UK Manufacturing PMI (Purchasing Managers’ Index) came in at 51.3 for May, up from 49.1 in April. This is a positive sign, as it shows that the manufacturing sector is growing again after staying weak for months. A score above 50 means expansion.
However, the UK Services PMI, which covers a much bigger part of the economy, dropped from 55.0 to 52.9. This means the service sector is still growing, but the pace is slowing down. Since the UK economy relies heavily on services, this weaker number pulled down overall market confidence.
Adding to the pressure, the U.S. dollar stayed strong after recent U.S. economic data supported the idea that the Federal Reserve might not cut interest rates soon. As a result, GBP/USD slipped further.
At the time of reporting, the pair is hovering near 1.3400, as traders wait for more clues from the UK and U.S. central banks.
Impact: If UK economic numbers stay mixed, the pound might remain weak. Investors could possibly stay cautious and wait for stronger signals from the Bank of England.