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GBP/USD on Track for Turbulence if UK Services Sector Slows

Yesterday’s high: $1.3548

Yesterday’s low: $1.3471

GBP/USD Hit 2-Month High on Hopes of Brexit Progress

The Pound achieved a 2-month high last week on hopes the UK’s Brexit negotiations might start making significant progress.

US Dollar traders were more cautious, holding off on trading over worries that a vote on tax reforms would fail to gain approval.

However, USD gained at the end of the week as the US tax bill passed through the Senate and GBP/USD gave up ground.

USD Outlook: High-Impact US Jobs Figures could Trigger US Dollar Rally

This week’s most influential UK data includes a services PMI figure on Tuesday and trade balance stats on Friday.

The UK services sector accounts for over 70% of total economic output, so improvement in this measure is usually Pound-supportive.

That said, analysts have forecast a small reduction in the services activity index, which could trigger a GBP/USD dip.

The trade balance data could conversely support Sterling, as expectations are for a moderate deficit reduction.

Over in the US, it’ll be worth watching Tuesday’s non-manufacturing PMI announcement, along with Friday’s jobs stats.

USD could decline if the PMI reading drops as predicted, but lower unemployment and a rise in non-farm payrolls might push the USD/GBP rate back up.

 

Key Events

December 5th

09:30 UK Services PMI

13:30 US Trade Balance

15:00 US Non-Manufacturing PMI

December 8th

09:30 UK Trade Balance

13:30 US Change in Non-Farm Payrolls

13:30 US Unemployment Rate

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To keep up to date with the US Dollar, visit the USD blog in our Currency News section.

Arron Morris


Senior Currency Broker
T: 01442 892 065

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