ExchangeRates.org.uk - At the time of writing GBP/USD was trading at around $1.2698.Up roughly 1.3% from last week’s opening levels.
The Pound (GBP) got off to a slow start last week as Sterling sentiment continued to be buffeted by the release of underwhelming UK PMI figures the week prior.
After struggling through the first half of the week, the GBP/USD exchange rate then rallied in the middle of the week in response to comments by Bank of England (BoE) Deputy Governor Clare Lombardelli.
Lombardelli emphasised the importance of addressing inflationary pressures, particularly in relation to rising wages and persistent services inflation.
And suggested the bank still had ‘further to go’.
Sterling’s ascent then slowed through the second half of the week, as a lack of UK data left the currency directionless.
Trade in the US Dollar (USD) was mixed through the first half of last week.
USD demand was initially weakened by Donald Trump’s appointment of Scott Bessent to lead the US Treasury as it was interpreted as a sign the incoming US administration may adopt a more moderate approach to trade and tariffs.
However, this sentiment was almost immediately reversed, with the US Dollar also rallying after a late-night social media post by Trump claiming he will impose tariffs on China, Mexico and Canada on the day he returns to office.
USD demand was then knocked in the middle of the week.
In addition to being dented by the minutes from the Federal Reserve’s latest policy meeting, the ‘Greenback’, the currency was also pressured by mixed US economic data.
The second half of the week saw the US Dollar remain subdued as it was undermined by holiday-thinned trade.
GBP/USD Exchange Rate Forecast: US Payrolls in the Spotlight
Looking ahead, a series of high-impact US economic releases may infuse volatility in the Pound to US Dollar exchange rate this week.
For USD investors the spotlight will be firmly on the latest US non-farm payroll report.
If November’s figures reveal that employment growth remained sluggish, it could undermine confidence in the resilience of the US economy and trigger some USD selling pressure.
In the meantime, the latest ISM PMIs may boost the ‘Greenback’ if they report US private sector growth expanded last month.
The UK’s own PMI releases will be the only UK data of note next week.
Barring an upwards revision to service sector growth, November’s finalised figures could pull the Pound lower.
This content was originally published on ExchangeRates.org.uk