Last week’s high: $1.3345
Last week’s low: $1.3218
Pound to US Dollar Exchange Rate Holds Ground despite Strong US NFP Data
The US Dollar’s performance continued to slow down last week, as mixed US data and uncertainty about US President Trump’s stance on trade protectionism limited market demand for the currency.
Investors had no reason to buy the Pound for most of the week, but as UK consumer confidence and manufacturing PMI data beat forecasts it found a little more support towards the end of the week.
This helped the Pound to edge higher on Friday, while the US Dollar failed to capitalise on a stronger-than-expected US Non-Farm Payroll report.
Friday’s US NFP results beat expectations in many key prints, but forex market movement was not notably influenced by the report. This was likely due to trade war concerns, and news from earlier in the week that US growth has been slower than expected in Q1.
As the US government has confirmed that it is placing controversial trade tariffs on imports from allies like the EU, Canada and Mexico, US Dollar appeal has been limited.
USD Outlook: US Trade and UK Services PMI in Focus
Next week’s Pound to US Dollar exchange rate movement is likely to remain driven by US trade developments, though upcoming ecostats could prove influential too.
If the US government and Trump show no signs of moving away from protectionist trade tariffs, or if other nations ramp up retaliation tariff plans, trade uncertainty may leave investors hesitant to buy into the US Dollar. This could make it easier for the Pound to US Dollar exchange rate to advance throughout the week.
The Pound’s outlook next week could be driven mostly by the results of Britain’s May services PMI, which will be published on Tuesday.
As services make up most of Britain’s economic activity, this will give investors a better idea of how the economy performed last month. If the data beats expectations, Bank of England (BoE) interest rate hikes will likely rise and the Pound will strengthen.
09:30 UK Services and Composite PMI
15:00 US Non-Manufacturing PMI
13:30 US Balance of Trade
13:30 US Non-Farm Productivity
13:30 US Jobless Claims
13:00 UK NIESR Growth Estimate
15:00 US Wholesale Inventories
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