A regular survey by market research firm GfK on Wednesday showed confidence among British consumers fell in November to its lowest level since just after the vote in June.
British manufacturing PMI fell to 53.4 from 54.2 in October, undershooting expectations for a rise to 54.5. Britain's economy has performed much better than expected since June's vote to quit the EU. But a bigger test will come next year when is expected to rise sharply, eating into households' spending power. The PMI's gauge of prices paid by factories for materials and energy shot up at a rate just shy of October's near six-year high, while prices of finished goods also rose sharply again. A clear majority of respondents who offered a reason for rising costs pointed to the weakness of the pound.
Investors were also digesting the need for more capital at British bank RBS after it failed the Bank of England's latest round of stress tests.
On the other hand, Euro zone manufacturers enjoyed their best month in November since the start of 2014 benefiting from a weaker currency and stronger demand. Manufacturing PMI for the Euro zone amounted to 53.7 in November, in line with an earlier flash estimate and ahead of October's 53.5.
In line with our trading strategy, we used yesterday’s EUR/GBP jump to get short at 0.8575. The EUR/GBP broke below the 38.2% retrace of the 2015-2016 rise today, which is a good signal for our position. A weekly close below this level will open the way for further drop. We have lowered our stop to 0.8535.
GrowthAces.com - Daily Forex Trading Strategies