GBP/USD Exchange Rate Steady Following Upbeat US Payrolls
Updated: The Pound Sterling to US Dollar (GBP/USD) exchange rate is struck trading in a narrow range this afternoon as markets digest the latest US payroll figures.
These revealed that the US economy added 128,000 jobs in October, notably more than the 89,000 forecast, while September’s reading was revised up to 180,000.
— Howard Archer (@HowardArcherUK) November 1, 2019
However the US Dollar struggled to capitalise on the upbeat payrolls after the subsequent ISM manufacturing PMI confirmed the slowdown in the US manufacturing sector continued unabated last month.
GBP/USD Exchange Rate Flat Ahead of Key US Data
The Pound Sterling to US Dollar (GBP/USD) exchange rate is currently in a holding pattern as markets await the release of the US non-farm payroll figures later this afternoon.
At the time of writing the GBP/USD exchange rate is trading at around $1.2950, virtually unchanged from this morning’s opening rate.
US Dollar (USD) Sell-Off to be Extended by Gloomy US Payroll Release?
The US Dollar (USD) is poised to tumble today, with the release of the high-impact US payrolls later this afternoon.
USD investors are bracing for a notable fall in payroll numbers, with the US economy only expected to have added just 89,000 jobs last month, down from 136,000 in September.
Economists expect Friday’s U.S. payrolls report will show job growth slumped to a five-month low in October.https://t.co/2sQto6YHE6
— BloombergQuint (@BloombergQuint) November 1, 2019
This will be quickly followed by release of the latest ISM manufacturing PMI later in the afternoon, which is forecast to show the US factory sector suffered its third consecutive contraction in October.
The two negative data releases will do little to lift the recent selling bias which has plagued the US Dollar and could see it fall below key resistance levels against the Pound.
Pound (GBP) Muted as UK Manufacturing Continues to Contract
The Pound (GBP) is trading in a narrow range this morning as markets digest the UK’s latest manufacturing PMI.
According to data published by IHS Markit, the contraction in the UK factory sector suffered its sixth consecutive month of contraction, abet at a slower pace than in September.
Despite this slight improvement, analysts remained gloomy, warning Brexit uncertainty was still taking its toll on the sector.
Duncan Brock, Group Director at the Chartered Institute of Procurement & Supply comments:
‘A minor uplift in overall purchasing activity did little to ease the agony for manufacturing companies in October as the sector remained submerged in contraction terrain and heading for recession.
‘As the manufacturing sector remains in the twilight zone, wondering whether to stock or de-stock, hire new staff, look for new business or batten the hatches once again, it looks like a scary end to the year.’
GBP/USD Exchange Rate Forecast: UK Election Campaigns to Kick Off Next Week
Looking ahead to next week’s session, we can expect UK politics to continue to dominate the Pound to US Dollar (GBP/USD) exchange rate as campaigning for the upcoming election officially gets underway with the suspension of parliament on Wednesday.
Also set to influence Sterling sentiment next week will also be the Bank of England’s (BoE) latest rate decision.
No policy changes are expected from the Bank this month, but we may still see the Pound face some headwinds if the BoE strikes a dovish tone in regards to potential policy changes after Brexit.
Meanwhile, USD investors will be focused on the publication of the ISM non-manufacturing PMI next week.
Growth in the US service sector struck a three-year low in September as the manufacturing slowdown began to filter through into other parts of the US economy.
Should service sector activity maintain its downward trajectory we can expect the US Dollar’s selling bias to persist, amidst fears the Federal Reserve may be forced into implementing another rate cut.