September 3, 2021 - Written by John Cameron
STORY LINK GBP/USD Forecast: Pound to US Dollar Exchange Rate Edges Higher as US Non-Farm Payrolls Fall
The Pound to US Dollar (GBP/USD) exchange has been mixed for much of the day as the latest services PMI from the UK failed to impress investors.
At the time of writing the GBP/USD pairing are trading at around $1.3958 as a sour market mood and positive US personal spending figures bolster the US Dollar.
Pound Sterling (GBP) Exchange Rate Struggles for Direction on UK Services PMI
The Pound has been struggling for direction for much of the day on the back of a disappointing UK services PMI reading from August.
The UK services PMI softened to 55 during the summer month, falling from 59.6 the month previous.
Tim Moore, Economics Director at IHS Markit, commented on the latest data, and why the PMI had fallen:
‘The service sector lost momentum for the third consecutive month as the impact of looser pandemic restrictions faded in August. Many businesses suffered constraints on growth due to staff shortages, self-isolation rules and stretched supply chain capacity.’
‘Service providers signalled the sharpest rise in employment since data collection began 25 years ago. Additional staff recruitment typically reflected efforts to return workforce numbers to pre-pandemic levels after widespread job cuts last year. Many survey respondents commented on long wait times to fill vacancies and an unexpectedly high staff turnover as the UK economy reopened.’
US Dollar (USD) Exchange Rate Dips on Non-Farm Payrolls Data
The US Dollar has dipped heading into the weekend as the latest non-farm payrolls failed to meet forecasts.
US non-farm rolls rose 235k during August, missing forecasts of 750k and falling from the 1053k the month previous.
Peter Quigley, CEO of Kelley Services, commented on what to expect from the payrolls earlier in the day, saying
‘There are a lot of jobs but not necessarily a lot of desirable jobs. And while employers are pounding the table wanting workers, workers are frankly taking their time, trying to figure out what jobs are the right fit for them. Job priorities have changed over the last 18 months.’
‘Employees are looking for something different. They're looking for flexible time. They're looking for remote opportunities. They're looking for enhanced stability in their job. They're looking for well-being programs.’
A volatile Euro has limited any major US Dollar gains today as the negative correlation between the pairing also causes the USD to fluctuate.
GBP/USD Exchange Rate Forecast: UK Construction PMI in Focus
Heading into next week, Pound traders will be looking towards the UK construction PMI figures.
The Markit construction PMI from the UK is expected to give a broad overview into how the sector is currently performing.
The GBP/USD pairing will continue to be driven by any further coronavirus developments during the start of next week’s trading.
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TAGS: Pound Dollar Forecasts