UK PMIs Fall on all Fronts, USD GBP Exchange Rate Rises

February 3, 2017 - Written by James Fuller

STORY LINK UK PMIs Fall on all Fronts, USD GBP Exchange Rate Rises

Gains Recorded in USD GBP Exchange Rate as Major January Jobs Stats Approach

The US Dollar has risen by 0.3% against the Pound today, following the news that Donald Trump is planning to start the repeal process on the Dodd Frank regulations for mortgages and lending.

While this might cause significant difficulties in the long-term, the near-term benefits will include a greatly deregulated house funding industry that could let more prospective homeowners get a foot on the property ladder, though at greater risk.

Other recent supportive US news has focused on initial and continuing jobless claims in late January, which have both fallen to lower levels than forecast.

USD Outlook: Greater USD GBP Advance Possible on Incoming US Payrolls Figures

The next US data to watch out for is due this afternoon, consisting of non-farm payrolls in January as well as unemployment and the non-manufacturing PMI for the same month.

While the unemployment rate is expected to remain at 4.7%, an upwards shift in non-farm payrolls from 156k to 175k has been forecast.

Despite these predictions, however, the non-manufacturing PMI is expected to drop from 57.2 points to 57, which might dampen demand for the US Dollar slightly.

GBP Slides against USD as UK Services PMI Greatly Disappoints Investors

As well as the Pound starting off on a poor footing today due to declining manufacturing and construction PMIs on Wednesday and Thursday, Sterling has failed to gain any positive momentum after the January services PMI was announced.
This declined further from 56.2 as expected, but the actual move down to 54.5 was worse than forecast and further diminished confidence in the Pound.

This release has come ahead of another potentially negative event for the Pound, which will be a meeting between European Council leaders in Malta this afternoon.

PM Theresa May’s Comments could Degrade Confidence in GBP Today

The only notable remaining UK event this week will be Theresa May’s attendance of the Maltese European Council meeting.

May is expected to echo US President Donald Trump’s attitude on NATO, stating that EU member states need to contribute more towards the organisation.

It remains to be seen whether the other leaders will take this to heart or turn away from May in the near-term, given that she may now be considered as an extension of the Trump administration’s goals.

May’s speech might also be discredited due to her political contact with Trump and the apparent animosity between Trump and some EU leaders.

International Money Transfer? Ask our resident FX expert a money transfer question or try John's new, free, no-obligation personal service! ,where he helps every step of the way, ensuring you get the best exchange rates on your currency requirements.

TAGS: Currency Predictions Daily Currency Updates Poun Forecasts