The US Dollar firmed against the Pound on Wednesday following the publication of a string of data reports which painted a mixed picture of the state of the world’s largest economy.
The Pound lost some strength earlier in the session after service PMI data came in below expectations. According to the Index output in the UK service sector fell to 60 in November, down from the 62.5 seen in October and below forecasts for a figure of 62. In a PMI any figure below 50 indicates contraction whilst above means expansion.
The afternoon saw the release of the first piece of important data for the USA. A report compiled by Automatic Data Processing (ADP) showed that US businesses created more jobs in November than in any other month this year. 215,000 new jobs were created in the private sector, a figure that smashed forecasts for a figure of 178,000. The figure suggests that US employers largely shrugged off the worries created by the debt impasse and political wrangling seen in October.
“Employers across all industries and company sizes looked through the political battle in Washington. If anything, job growth appears to be picking up,” the report said.
Next up was the important trade gap data released by the Commerce Department. The report showed that the USA’s trade deficit narrowed for the first time in four months as exports climbed to a record high. The overall trade gap narrowed to $40.6 billion, down from the $43 billion recorded in September. The improvement comes as global demand continues to be positive, especially from China, Mexico and Canada.
Adding to the positive news was the release of new home sales data. According to the commerce department the number of new homes sold soared by its biggest margin in 30 years in October. Sales leapt by 25.4% to 444,000. The rise suggests that the US economy is recovering well as consumers have more cash to burn.
Putting a dampener on things was the latest ISM non-manufacturing PMI report. According to the data service sector activity in the US expanded at a slower rate than expected in November, putting a downer over the nation’s economic outlook. The index slipped to 53.9 in November, down from a reading of 55.4 in October.
Analysts had expected the index to ease down to 55.0 last month.
The Dollar could make further gains on Thursday as GDP growth, and jobless claims data is due for release. If the data comes in positively investors are likely to increase their bets that the Federal Reserve will choose to taper its monetary easing programme sooner rather than later.
US Dollar (USD) Current Exchange Rates
The US Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.6115
The US Dollar/Euro Exchange Rate is currently in the region of: 0.7383
The US Dollar/ Canadian Dollar Exchange Rate is currently in the region of: 1.0676
The Pound Sterling/US Dollar Exchange Rate is currently in the region of: 1.6348
The Euro/ US Dollar Exchange Rate is currently in the region of: 1.3541
(Correct as of 15:40 pm GMT)
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