Higher UK Output Figures could Push GBP/USD Exchange Rate Higher
The Pound (GBP) has traded in a narrow range against the US Dollar (USD) today, hitting an exchange rate of $1.3197.
Today’s UK services PMI for June has risen above forecasts, raising confidence among GBP traders.
Looking ahead, there could be more support on next week’s UK industrial, manufacturing and construction output figures for May.
These data releases, out on 10th July, might raise confidence among Pound Sterling traders if they show a forecast-matching rise in output levels.
Higher levels of productivity bode well for UK economic growth, especially so if the monthly industrial and manufacturing figures rise out of negative ranges as forecast.
Future GBP/USD Exchange Rate Forecast: Can UK Earnings Data Boost Pound Sterling Demand?
Beyond next week’s UK output data, there could also be GBP/USD exchange rate movement on UK jobs market data due out on 17th July.
The morning’s ecostats will include unemployment rate, jobless claim counts and average earning stats.
In the ideal situation, lower unemployment will be reported alongside fewer jobless claim counts, along with an acceleration in the pace of average wage growth.
Despite this potential for GBP-boosting news, however, current economic forecasts don’t support such results.
The jobless rate is predicted to rise from 4.2% to 4.3%, while a higher number of jobless claimants is also anticipated.
Analysts are currently uncertain about how the earnings stats will print, however, so the Pound might have a chance to rally even if the unemployment data disappoints.
A faster pace of wage growth would increase the likelihood of a near-term interest rate hike, potentially as soon as August.
US Dollar to Pound Exchange Rate Forecast: Will Optimistic Fed Minutes Boost USD/GBP?
The most immediate US economic data will come out before the next UK stats, consisting of Thursday’s Federal Reserve minutes for their July interest rate meeting.
Fed policymakers voted to raise US interest rates back in June 2018 and the minutes could expose plans to raise rates again in the near-future.
Interest rate hikes from the Fed typically raise the US Dollar’s value, so hints of another incoming rate increase could push the USD/GBP exchange rate higher.
Late-Week Volatility: Will US Dollar to Pound (USD/GBP) Exchange Rate Turbulence Come on Payrolls Data?
The US Dollar (USD) also stands to move against the Pound (GBP) this week on Friday, when high-impact non-farm payrolls stats for June will be released.
These figures measure new jobs added to the US economy and are predicted to show 195k positions added in June, down from 223k in May.
It is worth noting that the payrolls figure is often a volatile one, so the actual reading might miss or exceed estimates by a large margin.
If more jobs are added during the month than first forecast, then the US Dollar (USD) could see a late-week rise against the Pound (GBP).