GBP/USD Exchange Rate Buoyed in Wake of UK Services PMI
The Pound US Dollar (GBP/USD) exchange rate appears is creeping higher this morning as markets react to the UK’s latest PMI figures.
At the time of writing the GBP/USD exchange rate is up nearly 0.3%, allowing the pairing to edge back above $1.30 following the fall on Tuesday.
Pound US Dollar (GBP/USD) Exchange Rate Steady as UK PMI Data Points to Robust Growth in the Third Quarter
The Pound (GBP) is currently trending higher against the US Dollar (USD) this morning, with below average growth in the UK’s service sector failing to inspire demand for Sterling.
According to data published by IHS Markit, the UK’s service PMI came in at 53.9 in September, down from 54.3 in August and falling slightly below market expectations.
Viewed alongside the UK’s other recent PMI releases this is through to point to the UK economy sustaining its 0.4% expansion of GDP in the third quarter.
Chris Williamson, Chief Business Economist at IHS Markit, said:
‘The service sector continued to report solid steady business growth in September which, alongside news of sustained expansions in both manufacturing and construction, suggests the UK economy expanded by just under 0.4% in the third quarter.’
US Non-Manufacturing PMI to Bolster US Dollar (USD)?
Meanwhile the US will publish its own snapshot of service sector growth this afternoon, with the release of the ISM Non-manufacturing PMI.
This may see the US Dollar (USD) strengthen today as analysts predict the US service sector will have enjoyed another month of robust expansion in September.
Further gains in the ‘Greenback’ may be driven by the release of the ADP employment figures this afternoon, with economists forecasting the US private sector will have accelerated its hirings last month.
GBP/USD Exchange Rate Forecast: US Payroll Figures May Strengthen the ‘Greenback’
Looking to the tail end of this week’s session, the focus for investors will likely be on the latest US payroll figures.
This could see the Pound US Dollar (GBP/USD) exchange rate weaken on Friday as markets forecast September will have brought another robust expansion in the US workforce, possibly leading to a fall in the US unemployment rate.
One potential limiting factor on the US Dollar however will be the accompanying wage figures, with economists warning that average hourly earnings may have fallen last month.
Meanwhile, in the absence of any notable domestic data any movement in Sterling may be driven by political developments in the UK, with GBP investors looking to Theresa May’s keynote speech at the Conservative party conference for any signs she may alter her Chequers Brexit plan in order to appease the EU.
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