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Will GBP/USD Fluctuate amid Mixed US Data Releases?

Pound Sterling and US Dollar notes

Pound US Dollar (GBP/USD) Exchange Rate Strengthens as Risk Appetite Returns to Markets

The Pound Euro (GBP/USD) exchange rate is strengthening this morning, as an upbeat market mood weighs on the safe-haven US Dollar.

At the time of writing, GBP/USD is trading at around US$1.2505, an increase of roughly 0.6% from the morning’s opening rates.

US Dollar (USD) to Fluctuate on Mixed Data Releases?

The US Dollar (USD) is set to see a bevy of data in the short term, beginning this afternoon with the latest JOLTs job openings figures. February’s data is forecast to fall from 10.824 million openings to 10.4 million.

If the labour market shows signs of cooling, it may lead to pared back rate hike bets from USD investors, which may weigh on the ‘Greenback’.

On Wednesday, February’s balance of trade data is scheduled to be released. An increase in the US’ trade deficit is forecast, which could create a headwind for the ‘Greenback’. With exports forecast to decrease, the slip in trade may prompt concerns over the health of the US economy.

Shortly after, the latest ISM service sector PMI is due to print. Some slowdown is forecast by economists, but activity in the sector is expected to remain in growth. Ultimately, if the index paints a positive picture USD may strengthen.

Finally, at the end of the week the latest non farm payrolls data is due. March’s reading is expected to show a further fall in the number of jobs created, forecast to print at 240,000 down from 311,000. If this prints in line with expectations, the ‘Greenback’ may weaken as the US labour market exhibits further signs of loosening.

Pound (GBP) to Waver amid Lacking Data Releases?

The Pound (GBP) is subject to minimal data releases for the remainder of the week, meaning that Sterling could be left vulnerable to domestic and external factors.

If the market mood begins to sour, the increasingly risk-sensitive aspect of GBP could see it weaken as investors move away from riskier currencies.

Elsewhere, the final print of March’s service sector PMI is due on Wednesday. If this deviates significantly from the preliminary reading, it may drive the currency in an equivalent direction. If activity in the service sector grew more than originally thought, GBP could strengthen.

Bank of England (BoE) policymaker speeches may provide some impetus for GBP. This afternoon, if BoE Chief Economist Huw Pill takes a hawkish stance Sterling may rally.

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