GBP / USD
On Tuesday, the British business activity index in the manufacturing sector for March showed an increase from 55.0 to 55.1 (the February figure was lowered from 55.2), while the forecast was 54.8. This helped the British currency to overcome the common pressure on the US dollar, while the pound's growth was 12 points. Today, investors can expect that the business activity index in the construction sector may show better than the forecast, which is 50.9 against the February value of 51.4 points. Even if this happens, the growth of the pound seems not enough, as the US employment data in the private sector and Services PMI came in worse than expected. Forecasts for US data are mixed, showing the number of jobs in the private sector from ADP last month is expected at 208 thousand compared to 235 thousand in February, while the final estimate of Services PMI from Markit for March is expected at 54.3 points against 54.1 points earlier, but ISM Non-Manufacturing PMI is projected to decrease from 59.5 to 59.0-59.2. A positive factor may be the volume of factory orders for February with a forecast of 1.7%.
Taking into account the further growth of yields on American bonds (today in the Asian session, the yield on 5-year securities rose to 2.598%), we are expecting for the British pound to return to the range of 1.3995-1.4070.
* The presented market analysis is informative and does not constitute a guide to the transaction.
