The Pound US Dollar (GBP/USD) exchange rate has been mixed throughout today’s session as the latest UK PMI’s add support to Sterling sentiment.
At the time of writing the GBP/USD pairing are trending around the $1.4157 level as the US Dollar sees itself heading higher on the back of the US ADP employment change figures which rose more than expected.
Pound (GBP) Firms on UK PMI Data
The Pound has been mixed against the US Dollar for much of the day, though the latest PMI figures from the UK for May have seen the currency edge higher.
The IHS Markit Services PMI from the UK rose to 62.9 points last month, signifying the fastest rate of output growth for almost a quarter of a decade as the economy recovers from the coronavirus pandemic.
Tim Moore, Economics Director at IHS Markit, which commented on the latest growth seen in the PMI’s saying:
‘UK service providers reported the strongest rise in activity for nearly a quarter-century during May as the roll back of pandemic restrictions unleashed pent up business and consumer spending.’
‘The latest survey results set the scene for an eye-popping rate of UK GDP growth in the second quarter of 2021, led by the reopening of customer-facing parts of the economy after winter lockdowns.’
Investors remain cautious over the Indian variant of the coronavirus derailing the UK’s roadmap out of lockdown, the variant is now dominant in 20% of the UK and the governments 21st June deadline moves ever closer.
US Dollar (USD) Supported by Employment Change Figures
The US Dollar has been supported against many of its major rivals today as a global risk-off mood, and impressive employment change figures help to bolster the currency.
ADP reports that 978,000 new private sector jobs were created during May, beating market forecasts of 650,000 new hires.
Though not as influential as the US Non-Farm Payrolls releasing tomorrow, the latest figure from ADP gives a clear indication into how the US economy is performing.
More so, the latest initial US jobless claims fell again to 385,000, a new pre-pandemic low.
Pound US Dollar Exchange Rate Outlook: US Non-Farm Payrolls in Focus
A quieter end of the week for Sterling will instead see investors focus on any further coronavirus developments heading into the weekend.
Any indication that the Indian variant of the virus could delay the UK’s economic reopening would cause the Pound to suffer.
US Dollar traders will have all eyes on the latest US Non-Farm payrolls data tomorrow, if payrolls increase as expected the ‘Greenback’ could head higher against GBP.