When is UK services PMI and how could affect GBP/USD?

UK services PMI overview

The UK economy will release its February services PMI later in the European session at 0930GMT, which is forecast to come in a tad weaker from January’s 54.5 to 54.2 last month. 

Deviation impact on GBP/USD

Readers can find FX Street's proprietary deviation impact map of the event below. As observed the reaction is likely to remain confined between 10 and 50 pips in deviations up to 2.5 to -2, although in some cases, if notable enough, a deviation can fuel movements of up to 70 pips.

How could affect GBP/USD?

A positive surprise in the services sector activity report would offer the much-needed impetus to the GBP bulls, sending the rate back above 1.23 handle. On the other hand, a bigger-than expected drop in the PMI reading could knock-off the GBP/USD pair towards 1.2200 levels.

A positive print of the construction sector PMI may not come as a surprise, given yesterday’s auspicious construction PMI report.

Key notes

UK: February services PMI to come in a bit weaker than consensus - TDS

“Recent CBI retail volumes and retail sales momentum suggest that some sectors of the services industry are softening, though this leaves the overall sector still firmly in expansion territory.”

About UK services PMI

The PMI service released by both the Chartered Institute of Purchasing & Supply and the Markit Economics is an indicator of the economic situation in the UK services sector. It captures an overview of the condition of sales and employment. It is worth noting that the UK service sector does not influence, either positively or negatively, the GDP as much as the Manufacturing PMI does. Traders want the highest possible reading as that will be taken as positive for the GBP. Any reading above 50 signals expansion, while a reading under 50 shows contraction.