EURGBP moved lower on the news that BoE Govenor Carney planned to stay at his post until June 2019. The trend reversed after a weak UK manufacturing number dropping to 54.3 which was slightly lower then market expectations of 54.6.
UK PMI not so bad
One has to remember that the October reading remains in well above the long run average of 51 and that the previous month has been revised higher to 55.5.
The report showed that output, new orders and employment continue to trend higher while the weaker Pound did raise input costs but new export orders was also higher.
It remains to be seen how much higher the PMI can rise in the long term as exchange rates continue to favor exports. Analysts expect the UK manufacturing sector to expand in Q4.
EURGBP’s next move?
Even with the positive data from UK PMI the headline was negative so a test and failure of .915 is needed in order for the pair to begin a move lower. Look for news from EU and the US during the next 10 days to initiate this move.