Pound US Dollar (GBP/USD) Exchange Rate Flat as Civil Engineering Plummets at Fastest Pace in 10 Years
The Pound US Dollar (GBP/USD) exchange rate was left muted today, and the pairing is currently trading at around $1.2930.
On Monday morning, data showed that while construction output fell at a slower rate last month, both new orders and employment continued to show a slump.
The construction PMI remained below the 50 no-change mark, although edged up from 43.3 in September to 44.2 in October.
Construction business optimism amongst the weakest seen since 2012 and civil engineering slumped at the fastest pace since October 2009 which likely weighed on Sterling.
Commenting on this morning’s data, Group Director at the Chartered Institute of Procurement and Supply, Duncan Brock said:
‘The construction sector’s distressing decline continued in October in spite of a small improvement in the headline index as a resolution to the political impasse seemed close. However with a fall in civil engineering not seen for a decade and the biggest drop in housebuilding since 2016, it appears that strength in the sector is seeping away.
‘To say these figures are disappointing is a big understatement. Given that the next political hurdle is December’s General Election, all eyes will be on the new administration and clear direction, because at the moment there is little insight into what could possibly pull the sector out of its ditch.’
US Dollar (USD) Muted on Trump and Xi News
At the end of last week, US President Donald Trump suggested a US-China trade deal could be signed in Iowa.
The President also claimed that negotiations between Washington and Beijing on the ‘Phase One’ talks were going well and he hoped the deal would be signed at a US location once the agreement was complete.
Meanwhile, according to China’s Foreign Ministry, President Trump and his Chinese counterpart, Xi Jinping have been in contact through ‘various means’ which sparked an upswing in risk appetite.
Foreign Ministry spokesman, Geng Shuang said:
‘As for a meeting between the leaders of China and the United States, what I can say is that President Xi and President Trump have maintained continuous contact through various means.’
The rise in risk appetite amongst investors likely weighed on the safe-haven ‘Greenback’.
Pound US Dollar Outlook: Will Disappointing US Factory Orders Weigh on USD?
Looking ahead to this afternoon, it is likely the US Dollar (USD) will slide against the Pound (GBP) following the release of the US factory orders data.
If factory orders decline by more than analyst predictions, it could put the ‘Greenback’ under pressure.
Meanwhile, Sterling could edge up against the Dollar on Tuesday morning following the release of the UK services PMI.
If October’s PMI claws its way out of contraction territory above the 50 no-change mark, it could cause the Pound US Dollar (GBP/USD) exchange rate to rise.