The Pound has been rejected at 1.3475 on the early London trading session on Friday, and retreated to session lows at the 1.3450 area at the time of writing. The pair has turned negative on the daily chart following the downward revision of the UK’s December $&P Global Manufacturing PMI, but remains within the weekly range, above 1.3400.
UK Manufacturing PMI figures released earlier on Friday revealed that the sector’s activity grew at a slower pace than previously estimated. The final reading has been revised to 50.6 from the preliminary estimation of 51.2, but remains above the 50.0 level that divides growth from contraction levels, and also above the 50.2 level seen in November.
Dollar recovery attempts remain limited
The immediate trend is bearish from late December highs above 1.3530, but the pair maintains most of the gains of the November-December rally, and closed the 2025 year with a more than 7% rally. U.S. President Trump’s erratic trade polices, signs of economic slowdown in the US, and the political pressures on the Fed to cut interest rates have weighed heavily on the US Dollar over the last 12 months
Looking forward, the Fed and BoE monetary policy paths are diverging. The UK central bank cut rates in December in a razor-edge decision, but the stubbornly high inflation levels and the strong opposition within the monetary policy committee practically discard any further easing move for the foreseeable future.
The Fed, on the other side, is expected to cut rates at least once more in 2026. Probably further than that if the US President replaces Jerome Powell for a more dovish-leaning Fed Chairman, as he has repeatedly pledged. Unless the context changes substantially, this is likely to keep US Dollar recovery attempts limited.
Economic Indicator
S&P Global Manufacturing PMI
The Manufacturing Purchasing Managers Index (PMI), released on a monthly basis by S&P Global, is a leading indicator gauging business activity in the UK’s manufacturing sector. The data is derived from surveys of senior executives at private-sector companies. Survey responses reflect the change, if any, in the current month compared to the previous month and can anticipate changing trends in official data series such as Gross Domestic Product (GDP), industrial production, employment and inflation. The index varies between 0 and 100, with levels of 50.0 signaling no change over the previous month. A reading above 50 indicates that the manufacturing economy is generally expanding, a bullish sign for the Pound Sterling (GBP). Meanwhile, a reading below 50 signals that activity among goods producers is generally declining, which is seen as bearish for GBP.
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Last release:
Fri Jan 02, 2026 09:30
Frequency:
Monthly
Actual:
50.6
Consensus:
51.2
Previous:
51.2
Source:
S&P Global
Economic Indicator
S&P Global Manufacturing PMI
The S&P Global Manufacturing Purchasing Managers Index (PMI), released on a monthly basis, is a leading indicator gauging business activity in the US manufacturing sector. The data is derived from surveys of senior executives at private-sector companies from the manufacturing sector. Survey responses reflect the change, if any, in the current month compared to the previous month and can anticipate changing trends in official data series such as Gross Domestic Product (GDP), industrial production, employment and inflation. A reading above 50 indicates that the manufacturing economy is generally expanding, a bullish sign for the US Dollar (USD). Meanwhile, a reading below 50 signals that activity in the manufacturing sector is generally declining, which is seen as bearish for USD.
Read more.
Next release:
Fri Jan 02, 2026 14:45
Frequency:
Monthly
Consensus:
51.8
Previous:
51.8
Source:
S&P Global
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