UK manufacturing PMI rises from 54.2 to 55.1 pts.

GBPUSD rises above 1.32 as investors brace for the Bank of England meeting

The UK economy seems to remain in a decent shape despite all the political uncertainty that has been related to legislative elections and incoming Brexit negotiations. While industry saw a setback in June, it quickly recovered in July, offering Bank of England another argument to consider an interest rate hike at the incoming meeting on Thursday.

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UK industry showed a recovery after a minor, elections related slump in June. Source: Macrobond, XTB Research 

The manufacturing PMI increased from 54.2 (revised from originally reported 54.3 pts.) to 55.1 pts. providing a hope that election-related uncertainty had only a short lived impact on the markets. Obviously the Bank of England will consider many issues in their decision – inflation missed expectations last month and wages remain soft but since Mark Carney has already hinted that the MPC could consider interest rates hike (that would be simply a removal of the special cut introduced after the Brexit referendum last year), the business activity data could support such step.

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GBPUSD remains in an upward trend and bulls could be eyeing 1.34 as the nearest resistance level. Source: xStation5 

Looking at the GBPUSD chart we can see that the upwards trend is alive and could be potentially continued as there is no vital resistance in sight. 1.34 was a barrier after an initial post-Brexit drop last year and this could be a resistance level again but this is still nearly 200 pips away.