The GBP/USD pair slipped to around 1.3510 during Wednesday’s early European session as the Pound Sterling (GBP) weakened against the US Dollar (USD) following disappointing UK S&P Global Purchasing Managers’ Index (PMI) data for September. Bank of England (BoE) External Member Megan Greene is scheduled to speak later Wednesday, which could influence sentiment.
UK private sector growth slows
UK private sector activity expanded at a slower pace in September compared with August. The S&P Global Composite PMI fell to 51 from 53.5, missing forecasts of 52.7. The Manufacturing PMI eased to 46.2 from 47.0, while Services PMI declined to 51.9 from 54.2.
Chris Williamson, Chief Business Economist at S&P Global Market Intelligence, commented: “September’s flash UK PMI survey brought a litany of worrying news, including weakening growth, slumping overseas trade, worsening business confidence and further steep job losses.”
USD supported by Fed caution
The US Dollar received support from Federal Reserve (Fed) Chair Jerome Powell’s cautious remarks on Tuesday. Powell highlighted the challenge of balancing persistent inflation with a slowing labor market, describing the situation as “challenging” and suggesting that interest rates are currently positioned to handle either risk. His comments could bolster the USD in the near term.
Data watch
Traders will focus on the US Personal Consumption Expenditures (PCE) Price Index for August, due Friday. A softer-than-expected reading could weigh on the USD and potentially provide relief for GBP/USD.
