Outlook For GBP USD Exchange Rate Remains Negative Following US Non-Farm Payrolls Data

Published: Friday, 1 February 2013 18:00 BST - Written by John Cameron

STORY LINK Outlook For GBP USD Exchange Rate Remains Negative Following US Non-Farm Payrolls Data

Today has seen a data-heavy day in the currency markets , triggering significant price action. As was ever the case, European releases led the way, with a rare piece of positive UK data. The latest PMI Manufacturing sector survey revealed that activity levels in the UK’s long-downtrodden combined Manufacturing industries increased last month. However, even an ostensibly positive British data set seem s to have the potential to hurt the Pound – even though this morning’s UK PMI Manufacturing survey showed an increase in activity, the 50.8 showing was below analysts’ expectations of a 51.0 print.

Meanwhile in the eurozone , the Markit PMI Manufacturing survey showed that continental factory output continues to shrink. However, in a twist on the UK’s version of the PMI Manufacturing figure, the eurozone’s figures showed that the slowdown in the key sector is running out of steam, with a return to positive growth likely sooner rather than later.

Elsewhere, this afternoon’s key US labour market data release showed that a lower than anticipated 157,000 new jobs had been in the nation’s domestic economy last month. Analysts had been anticipating a showing of 165,000, so the release came as a distinct disappointment for investors holding US Dollar-denominated assets. The one silver lining for such investors came with an upward revision for December’s NFP figure from an initial 155,000 print to a far healthier 202,000 provides some cause for optimism. The Pound US Dollar exchange rate (currency : GBP USD) has dipped to an intraday low of 1.5730 in the aftermath of the US jobs release. With the Pound struggling to gain any kind of support from market participants, there could be further downside to come for the pair in the short-to-medium term.

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