ExchangeRates.org.uk – At the time of writing was trading at around $1.2731, down roughly 0.2% from Friday’s opening levels.The US Dollar (USD) began the week rallying against its rivals as Donald Trumps tariff threats saw USD exchange rates surge alongside a better-than-expected ISM manufacturing PMI reading.
On Tuesday, the US Dollar remained on its upward trajectory following the publication of some forecast beating US JOLTs job openings data.
During mid-week trade, a slew of underwhelming data releases undermined the American currency following a lower-than-expected ISM services reading and ADP employment change.
Thursday saw another lackluster performance from the ‘Greenback’ as the latest initial jobless claims slumped to a fresh six-week low.
On Friday, the US Dollar firmed following the publication a mixed labor report.
The latest non-farm payrolls data came in above expectations while the latest unemployment rate also rise.
However, USD exchange rates firmed at the end of the week regardless.
The Pound (GBP) began the week on a slightly weaker note following the release of the UK’s November manufacturing PMI data, which revealed a more pronounced contraction than expected.
On Tuesday, the currency struggled to attract investor attention as the UK’s BRC retail sales monitor came in significantly below market forecasts.
By mid-week, Sterling saw a mix of gains and losses.
A stronger-than-anticipated services PMI reading offered some support, but remarks from Bank of England Governor Andrew Bailey weighed on the currency’s momentum.
On Thursday, the Pound remained largely stable, with no major UK data releases to influence its direction.
By the week’s end, GBP exchange rates firmed up against more volatile currencies, as a shift towards cautious trading favored the Pound over its riskier counterparts.
GBP/USD Exchange Rate Forecast: High Impact Data to Drive Currency Pair
Looking ahead, the primary catalyst of movement for the Pound US Dollar exchange rate looking ahead to this week will likely be the publication of several significant data releases.
Up first, the US will publish its latest inflation data on Wednesday which could infuse fresh volatility into USD exchange rates should the data report cooling US inflation in and un turn ramp up Federal Reserve interest rate cut bets.
Regarding the Pound, on Thursday, the UK is scheduled to release its latest GDP figures for October.
If the data reveals another negative result, it could introduce fresh headwinds into GBP exchange rates.
December 2024 Forecast: GBPUSD to Buck the Trend?
Economists at Lloyds (LON:) suggest the Pound Sterling could buck the usual seasonal trend of weakness this month.
“Typically, December is a softer month for the pound, with 2022 and 2023 standing out in that regard.
“But so far this year, end-of-year performance has been steadier.
“While that might partly be due to a pause in the dollar’s rally from its September low, GBP has looked perkier against a number of other currencies too.
“And there is reason to expect that course to be maintained.
” for instance continues to trend higher, supported by rate differentials and Eurozone economic and political stresses, which continue to weigh on the euro.
“The chart looks similarly constructive.
Sterling has also regained composure against the Canadian dollar following the pullback in November.
“Again, the longer-term trend in remains upward and the fundamentals gel with that.
“Where month-to-date performance might be more immediately overextended is against the Antipodean currencies, is nearing the top end of the trading range and there does not look an immediate catalyst for that to break out.
“Indeed, China stimulus expectations could give the Aussies a foothold.
“, where the prevailing trend is more clearly upward, would be the better long pick of those two.
“Where GBP could be exposed is against the yen, where year-end moves can get squeezy.
A hawkish sounding BoJ on 19th December is a potential catalyst for that.”
This content was originally published on ExchangeRates.org.uk
