Pound-Dollar can hold above $1.36 if pressure on the US Dollar from fiscal concerns and softer Fed bets offsets any drag from weaker UK retail sales and PMI data.
The Pound US Dollar (GBP/USD) exchange rate maintained a positive trajectory on Thursday, with the pairing being propelled to its best levels since mid-February.
At the time of writing, GBP/USD was trading at around $1.3646. Up around 0.3% from Thursday’s opening levels.
DAILY RECAP:
The US Dollar (USD) remained under pressure on Thursday, slipping to fresh multi-month lows as concerns over the US fiscal outlook continued to weigh on sentiment towards the ‘Greenback’.
The latest warning sign came as America’s national debt surpassed the $40tn mark for the first time, reinforcing concerns over the sustainability of the country’s finances and the growing cost of servicing its debt.
The milestone came alongside ongoing volatility in the US bond market, where long-term borrowing costs had climbed sharply, forcing the US Treasury to step in and announce it would at least double the size of its planned buybacks of longer-dated government debt.
The Pound (GBP) traded with modest support on Thursday, firming on the back of the Confederation of British Industry’s (CBI) latest industrial trends orders index.
The index printed at -25 this month, marking a continued contraction in order books, but a marked improvement from the -45 recorded in July and striking its best levels since late 2024.
The data points to surprising resilience in the UK manufacturing sector, despite headwinds posed by the war in the Middle East and rising energy prices.
Near-Term GBP/USD Forecast: UK retail sales and PMIs could test Sterling strength
Turning to Friday’s session, the Pound to US Dollar (GBP/USD) exchange rate may be pressured by the final UK economic releases of the week.
Friday’s European session opens with the release of the UK’s latest retail sales data, which is forecast to report a contraction in consumer spending and sap Sterling sentiment.
The subsequent publication of the UK’s latest PMIs could then drag the Pound even lower, as economists forecast that growth in the UK’s dominant services sector is likely to have slowed this month.
Closing out the session will be the publication of the latest US S&P PMIs. While not as influential as the ISM indexes, they could still lend the US Dollar support if they point to further resilience in the US private sector.
Our currency coverage draws on live market data, official economic releases and published bank research.
