GBPUSD Advances as UK PMI Indicates a Strong Rebound. In Feb 2023, the S&P Global/CIPS UK Manufacturing Flash PMI jumped to 49.2 versus 47 in Jan, surpassing analyst expectations of 47.5.

Both the manufacturing and service sectors had a resumption of expansion, with the latter outpacing expectations with an actual result of 53.3 instead of the predicted 49.2.

The respondents to the survey attributed the increase to rising customer demand and increased confidence as supply problems subsided. And, inflation started to moderate.

GBPUSD looks to these number

• UK Flash Manufacturing PMI Actual 49.2 Vs Estimate 47.5,
• Flash UK Services PMI Activity Index Actual 53.3 Vs Estimate 49.2
•  UK Composite Flash Output Index Existing 53 Vs Prediction 49.

GBPUSD gains on less cost burden

Since April 2021, the average cost burden has increased at the slowest rate. According to statistics from Feb. Even within the service sector where many firms remarked on the need to pass on rising wages. Food expenses, and energy costs. Prices charged inflation only slightly decreased.

The headline seasonally adjusted S&P Global / CIPS Flash UK Composite Output Index rose over the 50.0 no-change value for the very first time as of July 2022. Rising strongly from 48.5 in Jan to 53.0 in February.

Sources: S&P Global, CIPS, ONS

GBPUSD Cross-Encouraged by Flash data

The study also revealed some good news for immediate chances, as the amount of new business secured by UK private sector companies rose for the very first time in 7 months.

Service providers witnessed an increase in export sales for a third straight month, which contrasted with a little decline in the manufacturing sector.

The numbers are encouraging for the likelihood of a brief recession, with upcoming data releases likely to be crucial.

UK Posts Surprising Budget Surplus in January

With a surplus of GBP5.4 billion in January, the UK public finances statistics revealed this morning well exceeded expectations. based on projections, the deficit will be close to GBP 8 billion.

The Kingdom had not had a deficit of this magnitude in 25 years. Tax revenue is mostly to blame for the surplus, which is still far below the figure from January 2022.

This surplus was kept under control by energy subsidies and customs charges made to the European Union.

Market Response

The GBPUSD price rose 85 pip in response to the report, and the 1.2100 mark is now clearly in view. If we want to see more gains in the near future, the 1.2100 level will continue to be crucial.

The bigger Picture

But, when taking a broader view, the GBP is still under pressure. Markets are currently anticipating a further 25bps hike in Mar and possibly one more before the Bank of England takes a break (BoE).

In our judgment, there could only be still another 25-bps increase before a pause, which, if it happens, might cause significant harm to the GBP going ahead.

Considering that the US Federal Reserve appears prepared to raise the rates far into the summer. Should the Fed proceed as planned, the medium-term picture for the GBPUSD. It might include a persistent move below the 1.2000 level.

Key Technical levels