Pound Sterling to US Dollar (GBP/USD) Exchange Rate – ‘Greenback’ remains firmer despite ISM data

The US Dollar was trading at a two-week high against the Pound during Monday’s session despite the publication of weaker than forecast manufacturing PMI data. Against the Euro the ‘Greenback’ fell.

According to the Institute for Supply Management its factory index fell to 51.3 in January from the 56.5 recorded in the previous month. The figure was well below economist expectations for a figure of 56. Any figure above 50 indicates expansion. In a separate report released by Markit its PMI report showed a decline to 53.7 from 55 matching economist forecasts.

The report also said that new order growth fell at the fastest rate in 33 years, with the new orders index slumping to 51.2 from 64.4 in December. The employment index fell from 55.8 in December to 52.3, the weakest since June.

The Pound remained weaker after Markit said that the UK manufacturers PMI fell in January. The Euro however received support after data showed that the euro zone’s manufacturing purchasing managers index rose to a 32-month high of 54.0 in January, up from 52.7 in December and a shade higher than the preliminary estimate of 53.9. Even Greece posted a figure above 50.

Against the Japanese Yen the US Dollar slipped to a two-month low following the release of the ISM report. Demand for safe haven currencies bolstered the Yen and continued to provide support for the US Dollar against the Pound and emerging market currency’s.

Demand for the safe haven Yen continues to be underpinned by fears that a crisis is occurring in emerging markets and concerns over a possible slowdown in China. Emerging markets have been hard hit in recent sessions by concerns over the impact of reductions in Federal Reserve stimulus and fears over slowing growth China.

Tuesday sees the release of US Chain store retail sales data.

US Dollar (CAD) Exchange Rates

[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
US Dollar,,Pound Sterling,0.6118 ,
US Dollar,,Euro,0.7405 ,
US Dollar,,Canadian Dollar,1.1051 ,
US Dollar,,Australian Dollar,1.1354 ,
Pound Sterling,,US Dollar,1.6343 ,
Euro,,US Dollar,1.3503 ,

[/table]