Pound US Dollar Exchange Rate News: GBP/USD Flat following UK Manufacturing PMI

September 3, 2024 - Written by John Cameron

STORY LINK Pound US Dollar Exchange Rate News: GBP/USD Flat following UK Manufacturing PMI

The Pound US Dollar (GBP/USD) exchange rate remained stable on Monday after the UK's final manufacturing PMI for August was released.

At the time of writing, the GBP/USD was trading at around $1.3134, virtually unchanged from Monday’s opening levels.

Pound (GBP) Holds Steady following Manufacturing PMI

The Pound (GBP) held steady against most of its counterparts on Monday following the release of the UK’s final manufacturing PMI.

The index remained in expansion territory with a score above 50, reaching a 26-month high of 52.5.

Rob Dobson, Director at S&P Global Market Intelligence commented in the wake of the release: ‘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.’

This data underscored the strength of the UK’s manufacturing sector, bolstering GBP exchange rates despite a cautious market mood which saw investors shy away from riskier assets.

US Dollar (USD) Subdued amid Labour Day Closure

The US Dollar (USD) remained mostly unchanged on Monday as US markets were closed for Labor Day.

With no economic data releases, the 'greenback' was relatively quiet as a result.

A cautious market mood provided some support to USD, as it’s status as a safe-haven currency saw it rise against its risker rivals.

GBP/USD Exchange Rate Forecast: US PMI in the Spotlight?

Looking forward, the primary catalyst of movement the Pound US Dollar exchange rate on Tuesday will likely be the release of the latest US ISM manufacturing PMI.

After a disappointing result in July, which marked the sharpest contraction in the sector since the previous November, August’s data could bring volatility to USD exchange rates if it confirms another weak performance.

Turning to the Pound, a secondary domestic data release will likely drive the Pound on Tuesday amid an absence of any significant data releases.

The British Retail Consortium’s latest retail sales monitor for August is expected to show a minor increase, which may provide some support to GBP exchange rates should the data align with forecasts.

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TAGS: Pound Dollar Forecasts