Pound to US Rate News, Outlook: GBP/USD Fluctuates on US ISM Services PMI

September 6, 2024 - Written by John Cameron

STORY LINK Pound to US Rate News, Outlook: GBP/USD Fluctuates on US ISM Services PMI

The Pound US Dollar exchange rate firmed on Thursday following the latest ISM services PMI data from the US.

At the time of writing, GBP/USD was trading at approximately $1.3158, roughly up 0.2% from the start of Thursday's session.

The Pound (GBP) remained steady against the majority of its counterparts on Thursday despite a lull in UK economic data releases.

The currency was boosted by an overall sense of economic optimism, driven by a stronger-than-expected services PMI released on Wednesday.

August’s services index was revised upward, reflecting the UK's continuing economic strength and giving the GBP a lift during Thursday’s European trading session.

The US Dollar (USD) wavered against the majority of its peers on Thursday following the publication of the latest ISM services PMI report.

August's index exceeded expectations, rising from 51.4 to 51.5, ahead of to the anticipated dip to 51.1.

Steve Miller, Chair of the Institute for Supply Management Services Business Survey Committee, commented: ‘Many industries are reporting slow-to-moderate growth, with high costs and interest rate pressures frequently cited as negative factors affecting business performance and reducing sales and traffic.’

Despite this slight uptick within the services sector, USD struggled to gain momentum as the positive PMI was overshadowed by weaker-than-expected US employment data.

Looking ahead to Friday, US labour data will likely be the main driver of the GBP/USD exchange rate.

The US non-farm payroll report is expected to show growth in August, which could provide some support for the US Dollar should the data confirm a rise in job creation.

However, while the latest unemployment rate is expected to slightly dip, it is also forecast to remain near a three-year high, which could limit any potential USD gains.

With no major UK data releases expected for the rest of the week, the Pound could spend tomorrow trading without a clear trajectory.

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TAGS: Pound Dollar Forecasts