U.K. manufacturing PMI index drops in January

U.K. manufacturing PMI in January dropped from December’s print. The IHS manufacturing PMI index dropped to 55.3, recording a second straight month fall. However, the headline index continues to be above the 50 level, which separates contraction and expansion. While the outturn disappointed and contrasted with their stronger tone seen in the CBI Industrial Trends survey, the January reading is just modestly lower than the average of 55.9 seen in 2017, noted Lloyds Bank in a research report.

Most of the fall in the headline print was driven by a moderation in the rate of current output and new orders. Still, with the flow of new orders continuing to come through at a sound rate, companies recorded a rebound in prospects for future activity. Accordingly, manufacturing companies continued to hire additional workers – the rate of which picked up over the month.

In spite of the reading released today, as the manufacturing sector contributes just about 10 percent to the U.K. economic activity, the growth outlook will still be primarily driven by the dominant services sector, stated Lloyds Bank. The services PMI index, which is set to be released next week, a further rebound appears likely, building on December’s modest uptick, added Lloyds Bank.

At 16:00 GMT the FxWirePro's Hourly Strength Index of British Pound was highly bullish 108.717, while the FxWirePro's Hourly Strength Index of US Dollar was bearish at -99.0844. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex

FxWirePro launches Absolute Return Managed Program. For more details, visit http://www.fxwirepro.com/invest