There was no holiday cheer from this week’s PMIs, which are important gauges of the health of the British economy. Manufacturing PMI and Construction PMI managed to beat their forecasts in November, both remain mired below the 50-level, which points to contraction. This trend continued on Wednesday, as the Services PMI improved to 49.3, but missed the estimate of 50.0 pts. These readings in contraction territory are consistent with forecasts that the British economy will contract by 0.1% in the third quarter. Further weak economic data could sour investor sentiment and spoil the pound’s party.
Technical Analysis
GBP/USD is on an upward trend and continues to break above resistance barriers. The pair broke above resistance at 1.3100 on Wednesday and is within striking distance of resistance at 1.3200. There is a strong possibility that the pound will test this line before the end of the week.
Pacific Currencies – Summary
USD/CNY
USD/CNY climbed above 7.0700 on Wednesday, its highest level since October 23. However, the yuan has managed to recover somewhat, as the pair has retracted. Currently, the pair is trading at 7.0414, down 0.10% on the day.
AUD/USD
AUD/USD is trading at 0.6841, down 0.11% on the day. The pair showed a muted response to week numbers on Thursday. Retail sales in September slipped to 0.0%, down from 0.2% in August. The trade surplus narrowed to A$4.50 billion in September, down sharply from A$7.18 billion in the previous release. This was the lowest surplus recorded in 2019.
NZD/USD
After gains of almost 2.0% this week, NZD/USD has taken a pause. Currently, the pair is trading at 0.6536, down 0.19% on the day. The NZ dollar has benefited from solid Chinese service and manufacturing reports this week.