Forecast-Beating Services PMI Growth could Push GBP/USD Exchange Rate Higher
The Pound (GBP) could has risen slightly against the US Dollar (USD) today, which puts the pairing exchange rate near to a one-week high.
This appreciation comes on the news that the UK construction PMI has risen by more than expected during October, indicating a faster pace of sector growth.
Commenting on the data, IHS Markit Director Trevor Balchin said:
‘Construction firms continued to raise headcounts at a strong pace, suggesting they are not expecting an imminent contraction in demand.’
Looking ahead, the Pound to US Dollar exchange rate could see additional support from upcoming services PMI data, out on Monday next week.
This is expected to show a minimal rise from 53.9 points to 54 – such a result could raise confidence among Pound traders and increase Sterling demand.
The UK services sector is the single largest contributor to national economic growth, so a forecast-matching or forecast-beating rise could push the Pound higher.
Faster Pace of UK GDP Growth could Push GBP/USD Exchange Rate Higher
Looking beyond next Monday’s UK services PMI, the next major data will be 9th November’s GDP growth rate estimates for Q3 2018.
These are predicted to show a faster pace of economic activity for the quarterly and yearly readings, which might be enough to boost the GBP/USD exchange rate.
Although the upcoming GDP stats will only be preliminary figures, initial signs of growth could still be enough to raise GBP trader confidence.
US Dollar to Pound Outlook: Will US Jobs Market Data Cause GBP/USD Exchange Rate Rise?
US data could trigger a US Dollar to Pound (USD/GBP) exchange rate rally this afternoon, if the upcoming jobs market figures impress USD traders.
The afternoon will bring news of the US unemployment rate in October, alongside the month’s change in non-farm payrolls reading.
Current estimates are for no change to the jobless rate but a potentially US Dollar-boosting jump in the non-farm payrolls reading.
The payrolls figure measures changes to the number of persons in employment, so an as-expected increase of 190k persons could raise US Dollar demand.
It should be noted that the payrolls reading is often volatile, so the actual figure could print even higher above estimates.
Lower US Non-Manufacturing PMI could Bring USD/GBP Exchange Rate Losses
Looking ahead to the coming Monday, the US Dollar (USD) could drop back against the Pound (GBP) when October’s non-manufacturing PMI reading comes out.
The high-impact data release is expected to show a slowdown, with a shift from 61.6 points to 60.
Such a result could drain USD trader confidence and weaken the currency, even though such a reading would still leave the PMI firmly in the above-50 point growth range.