ExchangeRates.org.uk – The Pound to Dollar () exchange rate traded sideways on Monday, with an upbeat UK manufacturing PMI failing to provide Sterling with meaningful traction.Latest — Exchange Rates:
Pound to Dollar (GBP/USD): 1.36612 (-0.11%)
Euro to Dollar (EUR/USD): 1.18115 (-0.3%)
Dollar to Japanese Yen (USD/JPY): 155.4715 (+0.17%)
DAILY RECAP:
The Pound US Dollar (GBP/USD) exchange rate moved sideways on Monday as the UK’s final Manufacturing PMI failed to give a meaningful boost to Sterling.At the time of writing, GBP/USD was trading at $1.3699, marginally higher than its opening level.
The US Dollar (USD) stabilised on Monday, with the currency trading sideways as it was unable to sustain Friday’s recovery into the new week.
After plunging to multi-year lows last week, USD staged a strong rebound on Friday as US President Donald Trump said he would nominate Kevin Warsh as Chair of the Federal Reserve, with Warsh being seen as the most market-friendly option among the candidates.
However, USD failed to push further on Monday.
Although Warsh’s nomination eased worries about challenges to the Fed’s independence, markets still expect the US central bank to cut interest rates this year.
Meanwhile, the increasingly risk-sensitive Pound (GBP) initially softened against the safe-haven US Dollar on Monday as a risk-off market mood put some pressure on Sterling.
However, GBP was able to recoup its losses early thanks in part to an upwardly revised UK manufacturing PMI for January.
The final PMI score came in at 51.8, its highest level in 17 months and slightly above the preliminary estimate of 51.6.
That said, the Pound’s upside potential was limited.
Although the PMI score was welcome, with analysts celebrating signs of a recovery in factory activity, many economists warned that trade uncertainty and increasing cost pressures remain key risks to UK manufacturing through 2026.
Near-Term GBP/USD Forecast: Weak Jobs Data to Dent the Dollar?
Looking forward, Tuesday brings the latest US Job Openings and Labor Turnover Survey (JOLTS).
The data is expected to show a slight decline in job openings in December, with the number of vacancies set to touch the near four-year low struck in September 2024.
If the data prints as anticipated, it could lead to USD selling pressure as signs of a softening labour market boost bets on Federal Reserve interest rate cuts.
As for the Pound, UK economic data is in short supply on Tuesday, likely leaving Sterling to trade on wider market trends.
Risk appetite could influence the GBP/USD pairing.
If a bearish mood prevails, the increasingly risk-sensitive Pound could slip against the safe-haven US Dollar.
However, if the US JOLTS survey sees an uptick in risk appetite, Sterling could recover.
This content was originally published on ExchangeRates.org.uk
