Pound-Dollar could remain under pressure if US payrolls beat forecasts, while a weaker jobs report may trigger a sharp pullback in the Dollar.
The Pound US Dollar (GBP/USD) exchange rate fell on Thursday as geopolitical tensions soured the market mood.
At the time of writing, GBP/USD was trading at $1.3212, down almost 0.4% on the day.
Pound to Dollar (GBP/USD): 1.324686 (-0.13%)
Dollar to Yen (USD/JPY): 157.92549 (+0.23%)
DAILY RECAP:
The US Dollar (USD) rose on Thursday as a risk-off market mood supported the safe-haven currency.
Investors were anxious amid ongoing geopolitical tensions and a fresh rise in oil prices, following a Ukrainian attack on a Russian oil facility and threats from US President Donald Trump to ‘blow up’ Iran if a favourable deal isn’t reached.
The ‘Greenback’ managed to sustain its upside into the afternoon, despite the latest ISM manufacturing PMI printing below forecasts. The survey came in at 54.5 in September, down from 54.6 and below expectations for 55.
Still, the release pointed to a decent expansion in US factory activity last month, despite the slowdown.
The Pound (GBP) struggled to establish a clear direction on Thursday, with a quiet UK data calendar leaving Sterling short of fresh catalysts.
The only notable release was the UK’s final manufacturing PMI for September, which was revised slightly lower. The index registered 51.9, up from August’s 51.7 but just below the preliminary reading of 52.
The marginal revision left Sterling lacking support, while a gloomy mood put some pressure on the increasingly risk-sensitive currency.
Near-Term GBP/USD Forecast: US Payrolls in Focus
Looking forward, the focus on Friday will be the latest US non-farm payrolls report.
The US economy is expected to have added 90,000 jobs in September, a sharp slowdown from August’s 162,000 but a relatively decent figure by recent standards. As a result, it could offer USD modest support.
Steeper movement is likely if the payrolls report surprises markets. Another stronger-than-expected reading could propel the Dollar higher, while a weaker reading could see the ‘Greenback’ slump as markets adjust their bets on Federal Reserve interest rate hikes.
Meanwhile, UK data is thin on the ground, likely leaving Sterling to trade on wider market trends.
Our currency coverage draws on live market data, official economic releases and published bank research.
