The Pound to Dollar (GBP/USD) exchange rate rallied on Thursday as improving market sentiment and US Dollar weakness lifted the pairing.
At the time of writing, GBP/USD was trading around $1.3576, up more than 0.7% on the day.
Pound to Dollar (GBP/USD): 1.36032 (+0%)
Euro to Dollar (EUR/USD): 1.1733 (+0.03%)
Dollar to Japanese Yen (USD/JPY): 156.599 (-0.25%)
DAILY RECAP:
The Pound (GBP) strengthened on Thursday as markets digested the Bank of England’s (BoE) latest policy decision.
While the BoE left interest rates unchanged, one policymaker voted in favour of a hike, and the bank maintained a relatively firm stance on inflation risks.
This suggested that tightening could still be considered later in the year, offering some support to Sterling, although the absence of a clear signal limited further gains.
Additional support came from an improvement in global market sentiment, with the risk-sensitive Pound benefiting from a more upbeat mood.
Meanwhile, the US Dollar (USD) came under broad pressure as multiple headwinds weighed on the currency.
An improvement in risk appetite reduced demand for the safe-haven ‘Greenback’, while weaker-than-expected US GDP data added to the downside.
Further pressure came from reports of Japanese intervention to support the Yen, which triggered a pullback in USD/JPY and dragged the US Dollar lower more broadly as investors unwound bullish positions.
GBP/USD Forecast: PMI Data and Risk Sentiment in Focus
Looking ahead, the latest ISM manufacturing PMI will be a key focus for US Dollar investors.
A stronger-than-expected reading could lend the ‘Greenback’ some support, while any downside surprise may reinforce recent weakness.
For the Pound, the final UK manufacturing PMI may offer limited direction, with only modest impact expected unless there is a significant revision.
Broader market sentiment will also remain important, as shifts between risk-on and risk-off conditions are likely to influence both currencies.
