Pound US dollar (GBP/USD) exchange rate ticks higher following downbeat US data

Pound US dollar (GBP/USD) exchange rate gains ground as US durable goods orders contract

(Updated 16:05, 25/10/24) The pound US dollar (GBP/USD) exchange rate has pushed higher today, further recouping some of the losses suffered through the first part of this week’s session. However, the pairing still remains down on the week.

The upside comes as the latest US durable goods orders data put some pressure on the US dollar (USD). Orders growth contracted 0.8% in September. While this wasn’t as bad as the expected 1% decline, August’s reading was revised down from 0% to -0.8%.

Meanwhile, an improving market mood supported the increasingly risk-sensitive pound (GBP) against the safer ‘greenback’. Sterling also enjoyed the slightly more optimistic tone around next week’s Autumn Budget.

At the time of writing, GBP/USD is trading at $1.2992, up over 0.2% since the start of today’s European session but down over 0.4% on the week.

Original article continues below:

Pound US dollar (GBP/USD) exchange rate steady amid quiet trade

The pound US dollar (GBP/USD) exchange rate is trading in a narrow range today, although it’s holding on to yesterday’s gains, amid a lack of data on both sides and a mixed market mood.

At the time of writing, GBP/USD is wavering around $1.2978, virtually unchanged on the day.

Pound (GBP) underpinned by budget hopes

The pound (GBP) is holding steady today as GBP investors take a breather following a rather eventful week.

GBP/USD slumped to a two-month low on Wednesday amid ‘Trump trade’ and a gloomy market mood, but rebounded strongly yesterday as Chancellor Rachel Reeves confirmed she would change the government’s fiscal rules to allow her to spend more on investment.

Today, Sterling seems to have stabilised. GBP/USD is holding yesterday’s gains despite a slight weakening of market risk appetite. Hopes that next week’s Autumn Budget could be positive overall for the UK economy may be keeping the pound afloat.

US dollar (USD) quiet amid mixed mood

Meanwhile, the safe-haven US dollar (USD) is also somewhat subdued today. Although yesterday’s risk-on tone has faded, the market mood remains mixed overall, which is confining USD to a narrow range.

In addition, US Treasury yields – with which the US dollar has a positive correlation – are wavering sideways.

This has left the ‘greenback’ without a clear direction so far today, with USD investors perhaps waiting on the sidelines for some American economic data this afternoon.

GBP/USD exchange rate forecast: mixed US data to see the dollar waver?

Looking ahead, some American data due out this afternoon could influence the GBP/USD pairing.

First we have US durable goods orders, which are forecast to have slumped 1% in September. This could weigh on the ‘greenback’.

USD could enjoy some support later in the session, however, if the final consumer sentiment reading for October shows an improvement in American household morale.

As for the pound, UK data is absent from the calendar today. Therefore Sterling movement may be tied to risk appetite and domestic news.

A souring market mood could see the increasingly risk-sensitive pound weaken against the safe-haven US dollar. Meanwhile, if GBP investors remain optimistic about the fiscal rule changes ahead of next week’s budget, the pound could enjoy support.

Samuel Birnie

Contact Samuel Birnie


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