The Pound US Dollar (GBP/USD) exchange rate is moving without a clear direction this morning amid a lack of notable data releases.
At the time of writing the GBP/USD exchange rate is trading at around $1.2620, virtually unchanged from this morning’s opening rate.
US Dollar (USD) Muted amid Data Lull
The US Dollar (USD) is flat this morning amid a lack of market moving data releases.
Looking ahead, speeches from Federal Reserve policymakers on Wednesday could imbue the ‘Greenback’ with renewed movement. With both neutral policymaker Raphael Bostic and Fed hawk Michelle Bowman due to speak, mixed commentary could serve to drive market volatility.
However, joint reiteration of the Fed’s increasingly hawkish consensus in recent days may see USD strengthen amid congruent commentary.
Also due on Wednesday evening is the publication of minutes from the Fed’s latest monetary policy meeting. Should the report signify that policymakers intend to keep interest rates ‘higher for longer’, USD could firm amid waning Fed rate cut bets.
On Thursday, preliminary S&P PMI data is due for release. Economists expect to see the services and manufacturing indexes print at 52, and 50.2 respectively in February’s data. These readings would show a minor slowing from January’s activity, though by remaining firmly in expansion territory, the data will likely offer USD some support amid signs of economic resilience.
Also due out are the latest employment figures, which may see USD retreat should the data print in line with expectations. Initial jobless claims for the week ending 17 February are due to rise to 217,000, up from 212,000 the previous week. The minor uptick could serve to dent the ‘Greenback’, pointing to continual loosening in the US labour market.
Pound (GBP) Wavers amid Economic Pessimism
The Pound (GBP) is moving without a clear direction this morning amid a lack of fresh UK data.
Going forwards, markets may look to Bank of England (BoE) dove Swati Dhingra’s commentary on Wednesday afternoon. As the only policymaker to vote for an interest rate cut last month, Dhingra will likely advocate for looser monetary policy in the coming months, which could dent the Pound in the wake of last week’s bleak economic outlook.
On Thursday, preliminary UK PMIs could see Sterling rebound, with economist’s expecting an upbeat report for the private sector. With the vital services index set to print at 54.4 in February, GBP could strengthen. However, a less impressive 47.1 for the manufacturing sector could cap Sterling’s upside potential.
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