The health of the UK economy is better than expected according to data released earlier, at least in the Construction sector anyway.
This week there will be a number of data releases covering the health of the economy. The data releases are Purchasing Managers Index (PMI) readings, which are forward looking and offer us an idea as to the health and optimism in the industry. With reading’s over 50 being considered positive, June’s figure of 53.1 has given the Pound a boost especially after the expectations of 52.5.
Tomorrow at the same time (9.30am) there will be Services PMI figures released. This is arguably more important as this sector covers two-thirds of the UK economy therefore the data could impact the GBP to USD exchange rate more dramatically. The expectation is for a release of 54 which is the same figure as in May. If the actual data release deviates from this figure, there could be movement so it’s worth watching markets around this time. Do feel free to get in touch if you wish to be updated in the event of a major market move.
Mark Carney, the governor of the Bank of England will be speaking at 11am on Thursday. With hopes increasing of an interest rate hike from the BoE in August, I expect his comments to be followed closely with any hints of the rate hike happening likely to result in a boost to the Pound’s value.
Data out of the US could also result in a big move for GBP/USD rates this week owing to the volume of data releases due. There will be jobless and continuing jobless claims out of the US on Thursday at 1.30pm, and then at 7pm the FOMC Minutes will take place which could offer insight into future monetary policy from the Fed Reserve Bank.
Friday at 1.30am Non-Farm Payrolls will dominate as it’s one of the busiest times of the month for exchange rates. The data covers the amount of new jobs in the US outside of the agricultural sector, and 190k new jobs are expected.
Moving forward I expect to see the cable rate (GBP/USD) continue to see support at 1.30, and I think we will see the Pound trading higher than its current level as the year progresses. For more information on any of the above, feel free to get in touch using firstname.lastname@example.org.