UK PMIs to drive further sterling weakness

The factors like disappointing activity data, ECB easing, following recent confirmation in Government's planned fiscal consolidation are likely to weigh on GBP/USD this week.

"We forecast November manufacturing and services PMI to fall to 53.1 (consensus: 53.6; last: 55.5) and 54.3 (consensus: 55.0; last: 54.9), respectively. Furthermore, the market expects the November construction PMI to also moderate to 58.5 from 58.8 in October", says Barclays in a research note. 

ECB is likely to provide support to GBP appreciation against EUR, however GBP/USD would be sensitive to any changes in EUR/USD. Interest rate markets are currently expecting the first Fed rate hike by January 2016 versus late Q416 for the BoE, a historically long delay.