The Pound to US Dollar (GBP/USD) exchange rate softened as market attention focuses on Friday’s eagerly anticipated US Non-Farm Payrolls data which is forecast to show that the labour market in the worlds largest economy is continuing to perform well.
The Pound Sterling to US Dollar (GBP/USD) exchange rate regained some ground later on Thursday as the markets were moved by news from Europe.
The Bank of England’s monetary policy committee earlier left U.K. interest rates on hold at their current record low of 0.5% and maintained the size of its asset purchase program at £375 billion.
The Pound Sterling to US Dollar (GBP/USD) exchange rate continued to be softer as market attention turned to upcoming policy announcements from the Bank of England and European Central Bank. Further softness is forecast as US jobs data is likely to come in positively.
The Pound Sterling to US Dollar (GBP/USD) exchange rate is hovering close to a 14-month low and more losses are forecast if US jobs data comes in positively and adds to signs that the US economy is continuing to strengthen.
Positive Data Supports US Dollar Exchange Rate
Wednesday saw the US Dollar advance against most of its major peers including the Pound and Euro as data released by the Institute of Supply Management showed that activity in the USA’s non-manufacturing sectors increased more than expected in November. The ISM PMI rose to 59.3 in November, up from the 57.1 figure recorded in October.
An ADP jobs report also offered support despite coming in softer than forecast. The report showed that the US private sector created 208,000 jobs last month.
Non-Farm Payrolls Data in Focus
Economists are now focusing on Friday’s eagerly anticipated Non-Farm Payrolls data. The report is expected to show a rise in new jobs created from October’s number of 214,000 to 230,000.
Also of interest will be hourly earnings ad balance of trade data. A strong showing from those and the markets are likely to increase their bets that the Federal Reserve is getting closer to raising interest rates.
‘The US economy is still doing well, and the jobs data tomorrow will keep alive expectations that the Federal Reserve will start raising interest rates from the middle of next year. The market is driven primarily by policy divergence,’ said Lee Hardman, a foreign exchange strategist at Bank of Tokyo-Mitsubishi UFJ Ltd.
Sterling softened as forecasters predict that UK public spending could fall to levels not seen since the 1930’s following Chancellor George Osborne’s Autumn Statement.
More Gains Forecast for US Dollar Exchange Rate
Against the Japanese Yen the US Dollar advanced to a fresh seven-year high and advanced to a 2-year high against the Euro.
The Japanese currency has weakened broadly since the Bank of Japan unexpectedly expanded its stimulus program in late October. In contrast, the Federal Reserve ended its asset purchase program in October. The Fed is now expected to start raising interest rates around September 2015.
The ‘Greenback’ will also make further gains against the battered Euro if European Central Bank policy makers are more dovish than expected at the final ECB press conference of the year.
Pound Sterling to US Dollar Exchange Rate Today –
The Pound to US Dollar Exchange Rate Hit a Session High of 1.572.
The Pound to US Dollar Exchange Rate Hit a Session Low of 1.564.
The Pound to US Dollar Exchange Rate is trading in the Range of 1.570.
