Pound Sterling recorded the rebound up to 0.3 percent to the level 1.3666 to the US dollar. That was happened in the early European session yesterday. What is the cause?
The preliminary Purchasing Manager’s Index or PMI report for the manufacture sector and United Kingdom service showed the varied performance. It looks quite neutral for sterling.
The GBP rebound is caused by the profit taking action which also controlling the other USD rivals in the market. The IHS Markit announced that the service PMI only reaches 55.5.
That is for the August period In this year. Furtehrmore, it is not in line with the market expectation of 59.0 and also slowing down than the 59.6 achievement on July.
PMI is just Slightly Corrected
Based on the rumors, some private companies are experiencing the extreme output decline in this month. The PMI manufacture is just slightly corrected from 60.4 to become 60.1.
That is for the August period, but it is better than the expectation of 59.5. However, the service sector is more dominant than the manufacture in the United Kingdom economy
The composite PMI score also felt from 59.2 to become 55.3. It is different than the market expectation where the decline may only reach 58.4. A report is told by the survey respondents.
They said that the complicated business activities are caused by the staffs lacking and the supply chains problem. The IHS markit analysis indicated that the incident has been reaching 14 times.
Those Problems Become a Bright Point this Time
The output lacking because of the staff lacking and materials is more than before. That also become the biggest one since a survey which is done on January 1998. There is a unique thing.
That staff lacking and problems on the supply chain is becoming a bright point for the PMI report this time. That is felt by the forex traders in the market so far. How is that possible?
Actually, the lack of staffs is related to the salary growth. Meanwhile, the supply chain problem makes the further material price increase may happen in the future.
Both of them show the inflation pressure increase indication and the employment tightening which may push the UK central Bank or BOE. That institution may increase the interest rate earlier in 2022.
Meanwhile, the Oil Prices Increase
Based on the data, the prices of oil increase by 3% on Monday. That was recovered from the declines which have been happened for seven days. The US dollars was also weakening.
That situation was triggered by the increasing case of the delta variant COVID-19. The BRENT crude oil increased by $2.15 or 3.2% higher. So that it becomes $67.33 per barrel.
Before, it was touching the level of $64.60. The West Texas Intermediate or WTI crude oil increased for about $2.01 or 3.1% to become $64.15 for the October delivery period.
Both of those measurement sign the biggest lost that they have for more than nine month. BRENT declined by 8 percent and WTI was for about 9% based on the data in the market.
The Fuel Demand can be Slower
So many countries responded that the coronavirus infection increase caused the new rules about the travel restriction. They predicted to see more adjustments this week.
However, the market sentiment maybe bearish within the rising concerns about the slower fuel demand in all over the world. That was stated by a head of analyst in the Dikirim Securities.
China as as the biggest oil importers in the world has been applying the new restriction. That affects the delivery and global supply chain. The US and China have been making the flight limitation capacity.
Virus is still becoming a threat for the short term demand prospect. It is although there are some positive recovery signs that can be seen in China. The Jackson Hole meeting may give some advices for the market.
