The GBP/USD pair rebounded on Monday ahead of UK’s Manufacturing PMI for July. The pair was at a standstill at 1.3907.
UK’s Economic Concerns
The GBP/USD pair will react to the United Kingdom’s Manufacturing Purchasing Managers Index for July later in the day. Economists expect the index to post a dive from the previous month’s data. The index is expected to decline to 60.4 down from 63.9 in the previous month.
The surging coronavirus cases tied to the highly contagious Delta variant has seen many industries take a nosedive. Despite the vaccination rollouts in different countries, the virus has been increasing at an alarming rate.
The European Manufacturing PMI will also be released later today. The index is expected to fall from 63.4 in June to 62.6 in July. Many European countries are expected to report a decline in their manufacturing indexes.
The United Kingdom is expected to release its Gross Domestic Product (GDP) data for the second quarter next week. Analysts anticipate the quarterly GDP to remain slightly unchanged.
US Inflation Stance
The GBP/USD will respond to the US ISM Manufacturing Purchasing Managers Index (PMI) for July. The index is expected to slightly increase to 60.9 from the previous 60.6.
The Federal Reserve’s latest statement seemed to calm market fears. The Fed decided to maintain its interest rate decision until inflation meets the 2% target. Fed chair, Jerome Powell reiterated the current inflation surge could be transitory hence there was no rush in hiking interest rates.
The ADP Nonfarm Employment Change for July will be released later this week. Economists polled by Dow Jones expect the numbers to rise to 700,000 from the previous 692,000 in June. However, most companies have been reporting a shortage in workers.