Hot Topic – UK pound and US dollar

By | September 6, 2016

Here’s what happened to the GBP:

  • On Thursday, The Markit Purchasing Managers’ Index for the manufacturing sector came in at a higher than expected 53.3, while on Friday, the PMI for the construction industry additionally showed an increase to the previous month. Overall UK consumer confidence has actually additionally shown an increase.
  • Following the release of Thursday’s manufacturing PMI the pound increased by 1.1% versus the US dollar, to 1.32737 and versus the euro, it increased by 0.7%.
  • On a weekly basis, the GBP/USD increased by 1.3% & the EUR/GBP decreased by 1.7%.
  • So although this week, the pound has actually proven resilient since the Brexit vote, it has actually dropped in value by more than 10% versus both currencies since the referendum.

Across the Atlantic the US dollar has actually additionally been feeling the pinch:

  • Last Friday’s NFP came in at a disappointing 155k versus an expectation of 188k
  • While the unemployment rate remained unchanged at 4.9%, wage growth additionally disappointed along with a 0.1% rise versus an expectation of 0.2%
  • The Dollar dropped as a result but recovered quickly. Overall the dollar index ended the week slightly lower at 95.88.
  • Expectations for a rate hike decreased for both September & December, & numerous analysts are expecting the Fed to put any decision on hold until the presidential elections in Nov.

Coming up this week we have:

  • One of the crucial economic releases of the week – the EU interest rate decision on Thursday at 11:45 GMT.
  • The ECB has actually left interest rates unchanged during their last meeting but said that it would certainly be ready to intervene along with additional stimulus measures in case that the UK’s decision to leave the EU would certainly begin to weigh on the Eurozone’s economy.

The post Hot Topic – UK pound and US dollar appeared first on Forex.Info.

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