Article by ForexTime

The GBP/USD has turned lower on Wednesday after the UK reported a worse than expected purchasing managers’ report for September.  Traders will need to absorb a plethora of data Wednesday, including the U.S. ISM PMI report released later today.  With the employment report scheduled to be released Friday, the balance of the week is likely to be volatile.

The U.K. Markit manufacturing PMI fell to a 17-month low of 51.6 in September from a downwardly revised 52.2 in August. The median forecast had been for 52.5. Growth in new orders fell for a third month in a row. Input prices fell for the first time in five months. Traders will also need to absorb tomorrow’s construction PMI and Friday’s release of the services PMI which should offset the weakness in the manufacturing survey to some degree, though the slowdown in the manufacturing sector fits the BoE’s caution of a growth slowdown during Q4 due to the weakening economic picture across the Channel.

In the U.S. looking past Wednesday’s ISM manufacturing report for September, the week ahead holds ADP private payrolls and the government employment report on Friday.  The median forecast of a 200k September nonfarm payroll gain reflects continued upside risk signaled by ongoing tightness in initial claims, a firm Q3 producer sentiment and ADP trajectory, a solid vehicle assembly rate and an ongoing consumer confidence climb back above mid-2013 levels.  A stronger than expected number would likely help the dollar regain traction pushing the GBP/USD below support levels.

Article by ForexTime

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