GBP/USD Exchange Rate Steady as Markets Await Fresh Impetus
The Pound US Dollar (GBP/USD) exchange rate is trading in a narrow range this morning, with the pairing in a holding position ahead of the release of some key US economic data later this afternoon.
At the time of writing the GBP/USD exchange rate is trading at around $1.3161, virtually unchanged from this morning’s opening rate.
US Dollar (USD) to be Strengthened by Expanding US Service Sector?
After a poor start to the week, the US Dollar (USD) will be looking to recoup some of its losses later this afternoon with the publication of the ISM non-manufacturing PMI.
Economists forecast the PMI figures will show that growth in the US service sector accelerated in December, with the index expected to tick up from 53.9 to 54.5.
However USD investors will be wary of another slowdown in the US service sector after the ISM manufacturing PMI reported growth in the factory sector over the same period, slumped to its lowest levels since 2009.
Also on the docket for USD investors today will be the publication of the latest US factory order figures.
These may cap any upside in the US Dollar on the expectation they will show order growth contracted in November, with forecasts of a slump from 0.3% to -0.8%.
Pound (GBP) Steady as MPs Return to Westminster
Meanwhile, the Pound (GBP) is trapped in a narrow range this morning as UK politics returns to the fore once more.
UK MPs return to Parliament today, where they will resume their debate on Boris Johnson’s EU Withdrawal bill.
MPs are expected to scrutinise the bill for three days, it passes easily through the House of Commons thanks to the Conservative’s overwhelming majority.
GBP/USD Exchange Rate Forecast: Falling US Payrolls Set to Weigh on the US Dollar?
Looking a little further ahead, the Pound US Dollar (GBP/USD) exchange rate may find some support at the end of this week’s session with the publication of the latest US non-farm payroll report.
Economists are currently predicting that after surging by an amazing 266,000 in November, payrolls will have expanded by a more modest, yet still robust 160,000 in December.
However some analysts warn the payrolls could undershoot expectations given the weakness in the US manufacturing sector, potentially propelling the US Dollar lower on Friday.
In the meantime, GBP investors will be focused on a meeting between Boris Johnson and European Commission President, Ursula von der Leyen on Wednesday, in which the two are expected to discuss the next stage of Brexit negotiations.