ExchangeRates.org.uk - At the time of writing the GBP/USD was trading at around $1.3139, virtually unchanged from Monday’s opening levels. The Pound (GBP) managed to stay above ground against the majority of its peers on Monday following the release of the UK’s finalised manufacturing PMI. The index remained firmly in expansion territory (a score above 50), and came in at a 26-month high of 52.5. The data emphasized the UK manufacturing sector’s robust nature, underpinning GBP exchange rates despite a cautious market mood deterring investors away from riskier assets.
Rob Dobson, Director at S&P Global Market Intelligence said: ‘The UK manufacturing sector remained a positive contributor to broader economic growth in August. The headline PMI hit a 26-month high of 52.5, reflecting solid expansions in output and new orders and the strongest jobs growth for over two years. The upturn is broadbased across manufacturing, with the investment goods sector the stand-out performer.’
US Dollar (USD) Quiet amid Market Closure
The US Dollar (USD) traded largely sideways on Monday as US markets were closed for Labour Day celebrations. As such, the ‘greenback’ remained largely listless amid an absence of any economic data releases. Marginally supporting USD sentiment on Monday however was a cautious market mood. As an acutely safe-haven currency, USD exchange rates remained above ground thanks to a downbeat market mood.
GBP/USD Exchange Rate Forecast: US PMI to Drive Movement?
Looking ahead, the primary catalyst of movement for the Pound US Dollar exchange rate on Tuesday will likely be the publication of the latest US ISM manufacturing PMI. Following July’s lackluster reading, which reflected the sharpest contraction in the sector since November of last year, August’s reading could infuse volatility into USD exchange rates should the data confirm another disappointing print. Turning to the Pound, a mid-tier domestic data release will likely be the main catalyst of movement on Tuesday amid a lack of any further drivers. The British Retail Consortium’s latest retail sales monitor for August is forecast to marginally rise, which could offer GBP exchange rates some modest support should the data print as expected.
This content was originally published on ExchangeRates.org.uk
