Pound US Dollar Exchange Rate Climbs

October 25, 2024 - Written by Frank Davies

STORY LINK Pound US Dollar Exchange Rate Climbs

The Pound US Dollar exchange firmed on Thursday following the publication of the latest US and UK PMI indices.

At the time of writing, GBP/USD was trading at approximately $1.2972, up roughly 0.4% from the start of Thursday’s session.

The Pound (GBP) gained ground against most currencies on Thursday despite the release of some below forecast UK preliminary PMI data.

Both the manufacturing and services indices fell short of expectations in October, though they remained above the 50 mark indicating expansion.

The UK's manufacturing sector dipped from 51.5 to 50.3, missing the projected 51.4 and hitting a six-month low. Meanwhile, the UK's services sector decreased from 52.4 to 51.8, failing to meet expectations of maintaining its previous level.

Nevertheless, a distinctly optimistic market sentiment coupled with expectations that the UK's upcoming Autumn Budget will boost UK investment led to Sterling catching bids during the latter half of Thursday's European session.

The US Dollar (USD) lost ground against most of its counterparts on Thursday despite the publication of some better-than-expected US PMI data.

Preliminary S&P Global PMIs for October showed both manufacturing and services sectors outperforming market expectations.

The manufacturing index climbed from 47.3 to 47.8, surpassing the expected 47.4, while the services sector rose from 55.2 to 55.3, defying predictions of a dip to 55.0.

Even though the manufacturing index remained below 50, indicating contraction, the services sector stayed firmly in expansion territory.

Nevertheless, an overall positive market sentiment diminished demand for the US Dollar, given its safe-haven currency status.

Looking forward, the main driver of movement for the Pound US Dollar exchange rate on Friday is anticipated to be the release of key data from the United States.

The latest durable goods orders report could trigger a USD sell-off if it meets expectations, signaling a notable 0.9% drop in orders from the previous month.

For the Pound, the UK will release its latest GFK consumer confidence index which is predicted to hover near the six-month low seen last month.

Should the data print as expected, this could see GBP exchange rates close the week on the back foot.

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TAGS: American Dollar Forecasts Pound Sterling Forecasts