UK composite PMI flash actual 51.0 (forecast 51.8, previous 52.0)

UK composite PMI flash actual 51.0 (forecast 51.8, previous 52.0)

The UK Composite PMI flash data for July 2025 has been released, showing a reading of 51.0, down from June's 52.0 and slightly below the expected 51.8. This mixed signal has sparked a range of reactions in the financial markets, particularly for the Pound Sterling (GBP).

The Pound Sterling (GBP) has shown resilience against the US Dollar (USD), trading near 1.3520 as of Wednesday's European trading session. Despite the slightly disappointing PMI data, investors have remained bullish on the GBP due to the ongoing positive trade deal between the US and Japan, which has reduced tariffs from 25% to 15% [1]. Additionally, the Bank of England (BoE) is expected to cut interest rates in August, further boosting the GBP.

The UK government's borrowing data also played a significant role in market sentiment. The Office for National Statistics (ONS) reported that the government borrowed the second-highest amount of funds since 1993 in June, indicating mounting fiscal risks. However, this data did not deter investors, who are more focused on the potential economic benefits of the US-Japan trade deal and the anticipated interest rate cuts by the BoE [1].

Technical analysis of the GBP/USD pair shows that the currency is aiming to return above the 20-day Exponential Moving Average (EMA) close to 1.3520. The 14-day Relative Strength Index (RSI) has rebounded to near 50.00, indicating indecision among investors and buying interest at lows [1].

Looking ahead, investors will closely monitor the preliminary S&P Global Purchasing Managers’ Index (PMI) data for July, scheduled for release on Thursday. This data will provide further insights into the UK's economic health and the direction of the Pound Sterling.

References:
[1] https://www.mitrade.com/insights/news/live-news/article-1-979655-20250723