December 17, 2024 – Written by Tim Boyer
STORY LINK Pound US Dollar (GBP/USD) Exchange Rate Climbs
The Pound to Dollar exchange rate (GBP/USD) gained momentum on Monday following the release of UK’s and US’s preliminary PMI data for December.
On Monday, the Pound (GBP) edged higher against most of its major trading partners after the release of the UK’s preliminary PMI data for December.
The report showed that the UK’s manufacturing index continued to decline, falling from 48.0 to 47.3, which was below the expected increase to 48.2.
However, the UK’s vital services index exceeded market expectations, rising from 50.8 to 51.4, surpassing the modest forecast of 51.0.
This forecast-beating performance in the services sector provided a substantial boost to GBP exchange rates following the data release.
On Monday, the US Dollar (USD) experienced volatility following the release of the country’s preliminary S&P Global PMIs.
Much like the Pound, the US manufacturing index declined slightly, dropping from 49.7 to 48.3, which was below the anticipated rise to 49.8.
On a more positive note, the services index surpassed expectations, climbing from 56.1 to 58.5 instead of falling to 55.7. This marked the highest level in the services sector since October 2021.
Despite this strong economic performance, USD did not gain momentum following the release. Instead, it weakened against the Pound and remained relatively stable against other currencies.
GBP/USD Forecast: UK and US Data to Drive Movement
Looking ahead to Tuesday, the main driver of movement for the Pound US Dollar exchange rate will likely be the release of some high-impact economic data from both the UK and the US.
First up, the UK’s unemployment rate is expected to remain steady at 4.3%, while average earnings (excluding bonuses) are forecast to increase from 4.8% to 5%.
These economic indicators could significantly affect GBP exchange rates, particularly if there is any increased uncertainty regarding the UK’s labour market.
On the US side, the latest retail sales index will be released, and if the data meets expectations and rises from 0.4% to 0.5%, it could provide a boost to USD exchange rates.
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TAGS: Pound Dollar Forecasts
