GBP/USD Exchange Rate Little Changed Ahead of Jobs Data
The Pound Sterling to US Dollar (GBP/USD) exchange rate spent much of the European session trending in a softer position.
Although Tuesday’s UK GDP figure was revised to the upside and the US consumer confidence gauge delivered a negative surprise, Fed rate hike bets kept the US Dollar bullish.
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On Wednesday the Pound extended its longest run of losses against the ‘Greenback’ since July as the Markit gauge of UK Manufacturing slumped unexpectedly.
An increase in the index had been forecast but the measure actually declined from a negatively revised 52.2 to 51.6.
The faltering in the UK’s manufacturing sector was largely due to the knock on effect of a struggling Eurozone.
The Pound to US Dollar (GBP/USD) exchange rate fell to a low of 1.6158.
However, after a batch of patchy US data was released the GBP/USD exchange rate fluctuated and the Pound was able to recoup some of the day’s losses.
The major disappointment among the US stats was the US ISM Manufacturing PMI for September, which fell from 59 to 56.6 instead of coming in at 58.5 as expected.
That being said, the report did detail the most rapid pace of manufacturing-based job creation in two and a half years.
According to Markit economist Chris Williamson; ‘The final PMI came in below the earlier flash reading, signalling a slight loss of growth momentum in manufacturing compared to August.’
But Williamson was far from pessimistic, going on to comment; ‘The labour market upswing clearly bodes well for overall non-farm payroll growth to rise above 200,000 in September, especially given the improved rate of job creation also signalled by the flash services PMI.’
US Non-Farm payrolls figures are scheduled for publication on Friday. If the report indicates that the slack in the US labour market is tightening it would bolster both Fed rate hike bets and the US Dollar.
The US Markit Manufacturing PMI was also negatively revised today, with the flash figure of 57.9 being cut to 57.5.
The Pound Sterling to US Dollar (GBP/USD) exchange rate achieved a high of 1.6252
Separate US data revealed a decline in the level of construction spending in the nation.
Spending was expected to have risen by 0.5% in August on a month-on-month basis having climbed by a negatively adjusted 1.2% in July. However, the pace of spending actually dropped by -0.8%.
While these reports were disappointing, their adverse impact on the US Dollar was softened by a better-than-forecast ADP Employment Change figure.
The report showed that the US economy added 213,000 positions in September, more than the 205,000 forecast.
This data implies that Friday’s non-farms numbers may also surprise to the upside.
Pound Sterling to US Dollar (GBP/USD) Exchange Rate Forecast
Tomorrow potential causes of volatility in the Pound to US Dollar exchange rate include the UK’s Markit Construction PMI for September, the publication of a statement from the Bank of England’s Financial Policy Committee, US Continuing Claims/Initial Jobless Claims stats and US Factory Orders figures.
If the US employment numbers impress, the US Dollar could retain the upper hand against the Pound.
The Pound Sterling to US Dollar (GBP/USD) exchange rate is trading in the region of 1.6216
The Pound to US Dollar exchange rate was little moved on Thursday as the markets awaited the release of the latest US Jobless Claims data.
Following Wednesdays stronger than expected ADP Employment report economists are forecasting that the latest claims data will show a further strengthening of the US Jobs market.
Against other major peers the ‘Greenback’ fell broadly as economists speculated that the currency’s recent run of strong gains have been overdone.