The US Dollar made gains against the Pound on Thursday after the release of better-than-expected manufacturing and home sales data countered the effects of a worse-than-forecast initial jobless claims data.
Earlier in the session the Pound made its first decline against the US Dollar in six days after UK GDP data matched economist estimates and a report showed that the UK’s deficit was larger than economists expected in April.
“The market likes an upside surprise for the Pound. Obviously we’re a bit spoilt now given that anything merely in line with forecasts is deemed to be a disappointment,” said the executive director of UK corporate foreign-exchange sales at Nomura International.
In the afternoon came the US data releases which sticking to recent form came in mixed.
The first piece of US data released showed that the number of US citizens claiming jobless benefits increased unexpectedly last week.
The US Dollar to Pound exchange rate is trading around 0.5929.
According to the Labour Department the number of claimants rose by 28,000 to 326,000, up from the previous week’s revised figure of 298,000. Economists had been expecting the number of claimants to rise by 12,000 to 310,000.
Countering the rise in claimants was a separate report which showed that manufacturing activity in the US expanded at a faster rate than expected in May, easing worries over the strength of the economic recovery.
According to Markit its manufacturing PMI rose to 56.2 this month, up from the 55.4 recorded in April and beat forecasts for a fall to 55.5.
“This provides further confirmation that industry will aid a rebound in U.S. GDP in the second quarter, and other indicators from the survey suggest that the sector has plenty of momentum heading into the summer and beyond,” said Markit’s chief economist Chris Williamson.
Also supporting the ‘Greenback’ was a report which showed that existing home sales increased to 4.65 million in April from the 4.59 million recorded in the previous month.
The rise was just below economist forecasts for a rise of 4.68 million. Sales increased by 1.3% month-on-month beating the prior month’s fall of -0.2%.
US Dollar (USD) Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
US Dollar,
,Pound Sterling,0.5929 ,
US Dollar,,Euro,0.7327 ,
US Dollar,,Canadian Dollar,1.0906 ,
US Dollar,,Australian Dollar,1.0828 ,
Pound Sterling,,US Dollar,1.6867 ,
Euro,,US Dollar,1.3649 ,
[/table]
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