As Tuesday began the GBP to USD pairing was trending slightly higher as the Pound was boosted by surprisingly strong local house price data.
Although the ISM’s US manufacturing index had undergone a positive revision on Monday, the US Dollar still edged lower against Sterling after house prices were shown to have jumped by 0.7 per cent month-on-month following a 1.2 per cent monthly advance in April.
The Pound to US Dollar exchange rate was little-changed following the release of UK construction figures.
The measure of UK construction posted a modest decline, easing to 60.0 in May rather than advancing to 60.8.
Construction output remains 10 per cent lower than the peak level achieved before the onset of the global economic crisis.
However, over the course of North American trading the US Dollar strengthened modestly against the Pound in response to impressive US data.
The Pound to US Dollar exchange rate shed 0.5 per cent.
New York’s ISM gauge rallied from 50.6 in April to 55.3 in May and US factory orders advanced by 0.7 per cent in April.
The gain was considerably higher than the 0.5 per cent increase expected and was the third monthly climb.
Orders excluding transportation climbed by 0.5 per cent. However, durable goods orders advanced by 0.6 per cent, down from the 0.8 per cent recorded the previous month.
The factory orders increase for March was also revised to 1.5 per cent.
After the data was published Reuters News Agency stated; ‘Manufacturing is growing after moderating a bit during a very cold winter. It is likely to continue expanding, with a survey on Monday showing new orders at the nation’s factories at the highest level in five months in May.’
The ‘Greenback’ is also deriving support from the expectation that tomorrow’s ADP employment report will show an increase of 208,000 positions in May.
In April the US economy added 220,000.
A positive result would bode well for Friday’s non-farm payrolls report and could lend the US Dollar underlying support.
That being said, any gains against the Pound would be moderated if the UK’s Markit services/composite PMI impresses.
Economists have forecast that the services index slid from 58.7 to 58.2 and that the composite measure declined from 59.2 to 58.7 – so a surprising result would be well received.
GBP to USD Update – 04/06/14
The US Dollar softened against the Pound on Wednesday afternoon after data showed that employment in the USA increased less than expected in May and the nation’s trade deficit widened sharply.
According to ADP the number of new jobs created last month rose by 179,000, well below expectations for an increase of 210,000.
April’s figure was also revised down from 220,000 to 215,000.
A separate report released by the US Commerce Department showed that the USA’s trade deficit widened sharply in April to $47.24 billion.
The figure was worse than the $40.80 billion expected.
The US currency is finding support however as demand for safe haven currencies increased ahead of Thursday’s European Central Bank policy meeting.
The
Bank of England is also due to have a policy meeting also.
The BoE is widely forecast to leave interest rates and its asset purchasing rate on hold.
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