Renewed Losses Forecast for Pound Sterling US Dollar Exchange Rate (GBP USD)

October 7, 2015 - Written by Ben Hughes

STORY LINK Renewed Losses Forecast for Pound Sterling US Dollar Exchange Rate (GBP USD)

GBP Exchange Rate Gains on UK Manufacturing Production Increase: Pound Sterling Higher

The Pound Sterling (currency : GBP) recorded strong gains against the other sixteen most actively traded global currencies during this morning’s session thanks to data which revealed a pronounced improvement in activity levels in the UK’s manufacturing sector during August.

Pound Newsflash: GBP Trends at Best Rate of 1.36 against the Euro Today

The month-on-month increase of 0.5%, which was ahead of analysts’ expectations, followed a sharp mid-Summer decline during July and bucked the recent trend for slightly disappointing British data releases. Analysis from the Office of National Statistics (ONS), published alongside the figures, suggested that the improvement was partially fuelled by domestic car plants ramping up production once again in August following a widespread down-tools caused by an industrial dispute during July.

The closely-monitored Purchasing Managers Index survey of the domestic services sector, published earlier this week, was highly disappointing for investors holding the Pound, printing at its lowest level for over two years. Today’s manufacturing numbers assuage some of the pain caused by the below-par tertiary sector statistics, but the fact remains that over three quarters of the activity in the UK economy takes place in the services sector.

Foreign Exchange ALERT: GBP to USD Exchange Rate Advances to High of 1.53

The Pound Sterling had started the day languishing in the 1.3400s against the euro (currency : EUR), however the GBP EUR exchange rate improved to an intraday high of 1.3624 during the aftermath of the UK manufacturing sector data. The fact that August’s UK Industrial Production data, published at the same time, revealed a year-on-year pick-up of almost 2.0% provided the Pound with further support, helping to send the Sterling US Dollar exchange rate back up to as high as 1.5317 GBP USD.

Currency Market Predictions: Pound's Gains Forecast to Be Tested

However, the Pound’s improvement against the US Dollar on the day will be severely tested by this afternoon’s weekly Mortgage Application data from the States which pointed to a hefty increase of 25.5% in comparison to the previous week. Analysts forecast that the statistic will help to support the Buck in the lead-up to tomorrow evening’s publication of the minutes of September’s US Federal Reserve monetary policy meeting.

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