Pound US dollar (GBP/USD) exchange rate flat ahead of high impact US data
The pound US dollar (GBP/USD) exchange rate is trapped in a narrow range this morning following the publication of the UK’s latest services PMI.
At the time of writing, GBP/USD is trading at around $1.3118], virtually unchanged from this morning’s opening levels.
Pound (GBP) supported by domestic PMI
The pound (GBP) is holding steady against the majority of its peers this morning, supported by the publication of last months finalised services PMI.
The all importing services index came in higher than expected in August, with the index rising from 52.5 to 53.7, ahead of a more modest 53.3 expectation.
The forecast beating publication has supported Sterling in the wake of the release, as the data highlighted continued growth in the services sector, hitting a four-month high.
Tim Moore, Economics Director at S&P Global Market Intelligence commented:
‘August’s data highlighted a recovery in UK service sector performance as improving economic conditions and domestic political stability helped to bolster customer demand. New business again increased at a robust pace after a lull in decision-making earlier this summer. This fuelled the fastest upturn in service sector activity since April and extended the current period of growth to ten months.’
US dollar (USD) quiet ahead significant data releases
The US dollar (USD) is trending mostly flat against the majority of its peers this morning as investors likely hold off from placing any aggressive bets ahead of a duo of impactful data releases scheduled for this afternoon.
Up first, the US will release its latest Job Openings and Labour Turnover survey (JOLTs) for July, which is forecast to show a decline in US job openings.
Should the data print as expected, this could raise fresh concern over the overall health of the US labour market, and in turn stymie USD exchange rates.
Following that, the US will release its latest factory orders survey for the same time period, which is forecast to report a rebound. Will this be enough to cushion any potential USD losses?
GBP/USD exchange rate forecast: US data in the spotlight
Looking ahead to tomorrow, the primary catalyst of movement for the pound US dollar exchange rate will likely be the publication of the US’s latest ISM services PMI.
Although Augusts’ index is forecast to marginally dip, the data is expected to remain in the expansion zone (a score above 50), forecast to dip from 51.4 to 51.1.
Should the data print as expected, USD exchange rates could firm in the second half of tomorrow’s European session.
Turning to the pound, UK data will be largely absent for the remainder of the week, and as such could see Sterling trade in line with risk dynamics.
Should markets return to upbeat trade, GBP could be lifted towards the end of the week.