Last week’s high: $1.3036
Last week’s low: $1.2699
Strong US Jobs Data Knocks GBP/USD from Weekly Peak
Towards the end of last week, investors bought into the Pound en masse after a report emerged claiming that the UK and EU had largely agreed on arrangements for future financial services relationships. As the future of UK financial services had been one of the primary concerns of markets since the Brexit process began, the possibility of this report being accurate was a big relief to Pound traders.
Sterling was further supported by a surprisingly hawkish Bank of England (BoE) on Thursday. As the US Dollar was sold off amid lighter market demand for safe haven currencies, the Pound to US Dollar exchange rate easily registered significant gains.
However, towards the end of Friday’s session investors sold GBP/USD from its best levels as the key US Non-Farm Payroll report rounded off a week of strong data for the US Dollar.
Coming in well above the forecast improvement of 190k, the change in Non-Farm Payrolls figure came in at an impressive 250k, showing that US job growth was still trending strongly. The unemployment rate remained at 3.7% as expected.
USD Outlook: Major Week for US Dollar in Terms of Politics and Data
Unless there are any new major Brexit developments in the coming week, the US Dollar is more likely to be the primary cause of Pound to US Dollar exchange rate movement amid a major week for US data and political news.
Monday will see the publication of ISM’s key US non-manufacturing PMI, and Tuesday is the date of the US 2018 Mid-Term Elections. Throughout the day, citizens will be voting in local elections for the US Congress. Depending on how the elections go, they may have an impact on US President Donald Trump’s fiscal policy plans which could influence the USD outlook.
Towards the end of the week there will be even more for US Dollar investors to react to, including the Federal Reserve’s November policy decision on Thursday.
UK services PMI data and growth projections could influence the Pound’s strength, but any potential major developments in UK-EU Brexit negotiations would have a much greater impact on the Pound to US Dollar exchange rate.
09:30 UK Services and Composite PMI
15:00 US Non-Manufacturing PMI
US Mid-Term Elections
15:00 US JOLTs Job Openings
19:00 Federal Reserve Policy Decision
09:30 UK Trade Balance
09:30 UK Growth Rate
09:30 UK Manufacturing and Industrial Production
09:30 UK Business Investment
15:00 US Michigan Consumer Sentiment
15:00 US Wholesale Inventories
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