GBP/USD Exchange rate overview

Sterling broke through the $1.63 last week and peaked at $1.6304, an eight month high against the U.S dollar. Investors still view sterling as the best of a bad bunch as the single currency (Euro) and the U.S dollar continue to come under increasing pressure.

Last week saw Aprils UK purchasing manager’s index data (PMI) for the construction, manufacturing and the dominant service sector. All indicated growth had slowed compared to figures released in March, however, sterling’s loses were reduced amid the continued uncertainty surrounding the single currency.  Although growth had slowed there are still positives to be taken from the data as it shows the UK economy is still growing. 

As the week continued stronger data from the US helped the dollar claw back ground against Sterling.  US manufacturing unexpectedly advanced in April easing concerns that the US economic recovery is flagging. There was more positive news for the dollar in the form of initial jobless claims and continuing jobless claims. Both came in lower than forecast and could be seen as a sign the U.S economy is growing.

On Friday the non-farm payroll figures were released, the figures came in well under the predicted level of 170K, The US only created 115K new jobs in the month of March, This caused a small rise in the markets but data released soon after showed that the U.S unemployment rate had fallen unexpectedly and caused rated to fall from 1.62 back to 1.6137.

This week has once again indicated just how volatile the currency market can be. To put the week’s movements into perspective a £200,000 trade performed on Monday would have seen you receive $3260 more than the same trade performed on Friday. If you need to buy or sell dollars in the coming weeks click here to ensure you are making the most of your currency transaction.