- UK Final Services PMI sees upward revision to 39.5 in January.
- GBP/USD remains depressed above 1.3650 on the UK data.
- Eyes on US ADP, ISM Services PMI amid a broad USD bounce.
The UK services sector activity contracted less-than-expected in January, the final report from IHS Markit confirmed this Wednesday.
The seasonally adjusted IHS Markit/CIPS UK Services Purchasing Managers’ Index (PMI) was revised higher to 39.5 in January versus 38.8 expected and a 38.8 – last month’s flash reading.
Key points
Fastest decline in business activity since May 2020.
Job shedding accelerates amid shrinking order books.
Growth expectations rise to the highest for nearly seven years.
Tim Moore, Economics Director at IHS Markit, which compiles the survey
“Service providers experienced a steep downturn in business activity due to the third national lockdown in January, although the speed of decline remains much slower than last spring. Tight restrictions on travel, leisure and hospitality resulted in severely reduced trading among customer-facing businesses.”
"Temporary closures led to shrinking demand for business services and a ripple effect of corporate spending cutbacks. As a result, total new work fell at the fastest pace since May 2020 and this setback contributed to a steeper rate of job shedding at the start of the year.”
FX implications
The GBP remains unimpressed by the upbeat UK Services PMI, as GBP/USD keeps its recovery mode intact above 1.3650 amid a broad US dollar comeback. At the press time, the spot trades at 1.3658, almost unchanged on the day.
The US dollar looks to resume the recent rally, as it recovers losses against its main peers. The risk-on flows are seen cooling-off a bit in the European session, putting a fresh bid under the safe-haven US dollar.
All eyes on the US ADP jobs data and ISM Services PMI for fresh impetus while updates on the US stimulus will be also closely followed.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD drops below 1.1400 after Germany and EU PMI data
EUR/USD struggles to hold its ground and trades below 1.1400 in the European session on Wednesday. PMI data from Germany and the Eurozone showed that the business activity in the service sector contracted in April. Markets await comments from central bankers and US PMI data.
GBP/USD stays weak near 1.3300 after disappointing UK data
GBP/USD stays under bearish pressure near 1.3300 in the European session on Wednesday. Pound Sterling struggles to find demand following the weaker-than-forecast April PMI data from the UK. BoE Governor Bailey will speak later in the day and the US economic calendar will feature PMI reports.
Gold price takes it on the chin after Trump softens tone on trade and Fed
Gold price is undergoing some profit-taking and sees selling pressure on Wednesday towards $3,300 at the time of writing. The profit taking picked up on comments from United States President Donald Trump, who did a 180-degree turn on his stance on China and the Federal Reserve (Fed). After the closing bell, Tesla’s (TSLA) Chief Executive Officer Elon Musk said he will reduce his role at the Department of Government Efficiency.
Dogecoin lead double-digit gains across meme coins, with Shiba Inu, PEPE and BONK skyrocketing to new monthly highs
Top meme coins Dogecoin, Shiba Inu, PEPE and BONK lead the meme coin sector with double-digit gains on Wednesday following the crypto market recovery.
Five fundamentals for the week: Traders confront the trade war, important surveys, key Fed speech Premium
Will the US strike a trade deal with Japan? That would be positive progress. However, recent developments are not that positive, and there's only one certainty: headlines will dominate markets. Fresh US economic data is also of interest.
The Best brokers to trade EUR/USD
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.