Sterling climbed by nearly 1.15% against the dollar today as strong UK construction data and weaker than forecast U.S job numbers helped exchange rates push back over $1.5270. The pound had started the day sitting just over $1.51 but by the end of lunch rates had risen to a high of $1.5171 to claw back some of the lost ground we seen through out this week. For more information on live rates of exchange click here.
The pound was buoyed early on Friday after the release of the better than expected UK construction figures, the official numbers released by Markit showed the sector grew to 57.0 in July compared to 51.0 in June (any number over 50 shows the sector has expanded). It had been forecast we would only see a rise to 51.7, so with these figures coming in much higher it is another boost for the UK economy and is further proof that things seem to be improving.
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The major movement of the day came at 13:30 (BST) as the U.S released its latest job numbers. It had been predicted that 184,000 jobs were created last month but the actual figure missed expectations and came in at 162,000 (compared to the 195,000 jobs created in June), the lowest number of new jobs we have seen since January. As the figures were released the dollar weakened significantly and pushed the GBP/USD cross up by over a cent to reach the high of the day.
These latest job numbers will come as a major blow to Ben Bernanke and the U.S Federal Reserve (FED) as they had been looking for the jobs sector to keep on improving before starting to cut back on the $85 billion currently being pumped into the U.S economy.
With the jobs sector seeming to falter it could mean we will have to wait even longer before we see the FED take any action. This could be good news for the pound, if the UK economy keeps performing well and we see some positive moves by the Bank of England (BoE) in the coming weeks it is just possible we could see Sterling-Dollar exchange rates push back towards the $1.57 mark we witnessed in the middle of June.
As I said earlier in the week one of the forecasts I received from my brokers had revised the 12 month GBP/USD rate to $1.41 and following today's poor U.S data it might mean I will see these figures changed again in the coming weeks. I will of course let you know if anything happens.
With so much potential volatility in the FX markets it may be worth looking at Stops and Limit Orders if you are thinking of buying or selling dollars in the coming months. These contracts can protect you against adverse market movements and help target a rate that might not be currently available. For more information on the types of contract I can offer click here or if you would like to discuss your options in more detail then use the link below and complete the contact form for a free, no-obligation consultation.
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