FX.co ★ Hot forecast for GBP/USD on July 25, 2023

According to preliminary estimates, the UK's Services PMI fell to 51.5 in July from 53.7 in June, below expectations of 53.0 points. The UK Manufacturing PMI fell to 45.0 in July versus 46.1 expected and 46.5 - June's final readout. As a result, the UK PMI composite fell to 50.7, instead of decreasing from 52.8 points to 52.3 points. The UK's downbeat PMIs weighed heavily on the pound sterling.

In the afternoon, a similar situation was partially supported by US data, which, unlike Europe, turned out to be slightly better than expected. The manufacturing index, instead of falling from 46.3 points to 46.0 points, jumped to 49.0 points. However, the Services PMI dropped from 54.4 points to 52.4 points, missing estimates of only falling to 54.0 points. It was precisely due to the services sector that the composite index decreased from 53.2 points to 52.0 points, although it was expected to fall to 52.6 points. The results of the Services PMI prevented the dollar from rising further, but the sudden growth in the manufacturing index did not weaken it either. As a result, the market was in a state of equilibrium for a while.

Considering that the Federal Open Market Committee meeting is scheduled for tomorrow and in light of today's empty economic calendar, we should brace ourselves for a low-volatility day. Investors will likely avoid taking risks. After all, the main intrigue lies in Federal Reserve Chair Jerome Powell's subsequent comments. Of course, the market is waiting for statements about ending rate hikes and preparing for future cuts in the foreseeable future. However, recent statements by Fed officials have implied that additional tightening would be needed.