Sideways Trend as Pound Flat Against US Dollar amid Absence of Data

October 15, 2024 - Written by John Cameron

STORY LINK Sideways Trend as Pound Flat Against US Dollar amid Absence of Data

The Pound US Dollar exchange traded sideways on Monday as a lack of both UK and US economic data releases left the currency pairing largely flat.

At the time of writing, GBP/USD was trading at approximately $1.3056, virtually unchanged from the start of Monday’s session.

The US Dollar (USD) had a sluggish start to the week as a dearth of domestic economic data left the currency mostly directionless.

Despite this, the safe haven 'greenback' managed to marginally firm against its riskier counterparts on Monday, buoyed by jittery market conditions.

Persistent tensions in the Middle East sparked a flight to safety, driving investors towards the US currency at the expense of its risk-sensitive peers.

The Pound (GBP) saw little movement against most of its counterparts on Monday as a lack of UK data releases left GBP struggling to catch bids.

After a quiet data week last week, GBP investors seemed hesitant to make bold moves ahead of some upcoming high-impact UK data releases scheduled for release this week.

Nevertheless, the Pound managed to maintain its ground against most currencies despite the lack of driving factors.

Tuesday's movement for the GBP/USD pair is anticipated to be driven primarily by the UK's upcoming labour data.

While UK unemployment is projected to hold steady at an eight-month low of 4.1% in August, average earnings (excluding bonuses) are expected to dip from 5.1% to 4.9%, a low not seen in over two years.

If the upcoming jobs data verifies a slowdown in UK wage growth, it may strengthen the case for a Bank of England interest rate cut, potentially putting downward pressure on the Pound.

Shifting focus to the US Dollar, domestic data releases are scarce this week, potentially leaving USD exchange rates to fluctuate based on risk sentiment.

Given its safe-haven status, the US Dollar may appreciate during periods of market pessimism, while a shift towards optimism could diminish the currency's allure.

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TAGS: Pound Dollar Forecasts