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Home / Analytics / Forex analysis & forecasts / Forex Fundamental analysis / The Pound remains in the range. Overview for 03.08.2016
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The Pound remains in the range. Overview for 03.08.2016

On Wednesday, the GBP/USD pair is moving upwards a little bit; the US Dollar’s weakness is more important for investors that the “sad” statistics from the United Kingdom.

The British Pound is falling slightly against the US Dollar on Wednesday. The current quote for the pair is 1.3341.

The UK published some very interesting statistics today, and if the market were more sensitive to such news, the Pound would be “as good as dead”. But today the national currency looks calm. So, the business activity index in the service sector according to Markit / CIPS in June in Great Britain fell to 47.4 points against 52.3 points the month before. Everything, which goes under 50 points, a very important psychological threshold, means that the activity in the sector is reducing and the sector itself is “shrinking”.

In this case, it’s important to notice that the service sector in the United Kingdom has been growing dynamically over the last 3 and a half years, and the current decline is the first one over this period of time. The last time the activity in the non-manufacturing sector in the UK decreased was in December 2012. Moreover, the current difference in latest numbers, 4.9 points, is the biggest over 7 years.

The components of the report show that the number of new order reduced. One also can see some “collapse” in construction-in-progress indicator.

If in June, when industries and consumers didn’t find themselves face to face with the brexit decision, the activity decreased, it’s hard to imagine what the July’s statistics may bring. If the July’s statistics still tends to be negative in the service sector, there will be more reasons to expect the recession in the United Kingdom’s economy.
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