September 4, 2012
Chop, chop, chop! Cable spiked here and there yesterday but managed to end in the green at 1.5890. Guppy, on the other hand, suffered a tiny loss as it closed 6 pips below its 124.44 open price.
Since U.S. traders were off enjoying their Labor Day holiday, liquidity was a tad lower during yesterday's trading, which meant that volatility was higher than usual. Because of that, GBP/USD had a choppy day in the markets before it got a strong boost from better than expected U.K. manufacturing PMI.
For the month of August, manufacturing conditions improved slightly, although the PMI still signaled a contraction. The reading climbed from 45.2 to 49.1, outpacing the consensus at 46.1.
Today, it's the construction industry's turn to release its PMI for August at 8:30 am GMT. Analysts are expecting the figure to dip from 50.9 to 50.1, reflecting a slower expansion for the month. Make sure you keep an eye out for the actual release because weaker than expected results or a reading below 50.0 could force the pound to return its recent gains.
"The only cable I watch is the pound baby."