Weak UK PMI data dragged down the pound, while a slight rebound in the US dollar pushed GBP/USD down to around 1.3510.
2025-09-24 14:11:44
In early European trading on Wednesday, the British pound came under downward pressure against the US dollar, trading at around 1.3510. The latest UK Composite PMI for September fell to 51, significantly lower than the previous reading of 53.5 and the expected 52.7, indicating a significant slowdown in the UK private sector's expansion momentum.
The manufacturing PMI dropped from 47.0 to 46.2, and the service PMI dropped from 54.2 to 51.9, both indicating a weak economy.
Chris Williamson, Chief Business Economist at S&P Global Market Intelligence: "The flash UK PMI for September sent a series of worrying signals, including slowing growth, weakening overseas demand, deteriorating business confidence and a sharp drop in jobs."
On the other hand, Federal Reserve Chairman Powell said in his speech on Tuesday that U.S. policymakers are facing the dual challenges of still resilient inflation and a weakening job market. He stressed that interest rates are currently sufficient to cope with risks, suggesting that there will be no rush to cut interest rates significantly.
This cautious attitude has given the US dollar some short-term support, putting additional pressure on the pound. The market will now focus on the US core PCE price index released on Friday. If the data is weak, it may put pressure on the US dollar, thereby easing the decline of the pound.
From a technical perspective, GBP/USD has retreated from its highs and is currently hovering around 1.3510. It has fallen below the 20-day moving average support in the short term, indicating that bullish momentum is weakening. If the exchange rate continues to fall, the support below is in the 1.3480 and 1.3450 areas.
On the upside, if it can return to 1.3560 and stabilize, it is expected to retest the 1.3600 mark. Overall, the British pound is weak in the short term, and its trend is still dominated by macroeconomic data and the performance of the US dollar.
Editor's opinion:
Weak UK PMI data underscored downward economic pressure, while the US dollar, supported by the Federal Reserve's cautious stance, maintained a short-term advantage, putting significant pressure on the GBP/USD pair. If core PCE data falls short of expectations, the pound could find some respite, but continued pressure from the UK's weak economy remains a concern in the medium term.
The manufacturing PMI dropped from 47.0 to 46.2, and the service PMI dropped from 54.2 to 51.9, both indicating a weak economy.
Chris Williamson, Chief Business Economist at S&P Global Market Intelligence: "The flash UK PMI for September sent a series of worrying signals, including slowing growth, weakening overseas demand, deteriorating business confidence and a sharp drop in jobs."
On the other hand, Federal Reserve Chairman Powell said in his speech on Tuesday that U.S. policymakers are facing the dual challenges of still resilient inflation and a weakening job market. He stressed that interest rates are currently sufficient to cope with risks, suggesting that there will be no rush to cut interest rates significantly.
This cautious attitude has given the US dollar some short-term support, putting additional pressure on the pound. The market will now focus on the US core PCE price index released on Friday. If the data is weak, it may put pressure on the US dollar, thereby easing the decline of the pound.
From a technical perspective, GBP/USD has retreated from its highs and is currently hovering around 1.3510. It has fallen below the 20-day moving average support in the short term, indicating that bullish momentum is weakening. If the exchange rate continues to fall, the support below is in the 1.3480 and 1.3450 areas.
On the upside, if it can return to 1.3560 and stabilize, it is expected to retest the 1.3600 mark. Overall, the British pound is weak in the short term, and its trend is still dominated by macroeconomic data and the performance of the US dollar.
Editor's opinion:
Weak UK PMI data underscored downward economic pressure, while the US dollar, supported by the Federal Reserve's cautious stance, maintained a short-term advantage, putting significant pressure on the GBP/USD pair. If core PCE data falls short of expectations, the pound could find some respite, but continued pressure from the UK's weak economy remains a concern in the medium term.
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