The GBP/USD cross has remained relatively flat today with exchange rates staying within a 30 pip range, trading between $1.6730 and $1.6760. So why was the market so flat? It was just a case of the UK and U.S. economic data releases cancelling each other out. Figures released today from both sides of pond failed to meet expectations which meant neither the pound or dollar really got going.
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What happened today?
The UK suffered (what has come to be) a rare blip today, with manufacturing, net lending and mortgage approvals failing to meet forecast. Normally this would have seen the pound lose ground against its major counterparts but with the U.S also posting worse than expected manufacturing numbers, plus weaker than forecast construction spending figures, meant GBP/USD rates remained relatively unchanged from the opening price this morning.
What to look out for this week.
It is a very busy week in terms of data releases and there are a number of things that could impact rates over the course of the next few days.
From the UK we have latest Bank of England announcement
and Mark Carney may use the meeting to try and talk the pound down which could see GBP/USD suffer. However, we will also see the latest
construction and services PMI figures and if both are positive could lend some
extra support for the pound.
From the States the main data releases are the non-farm
job numbers which will be released on Friday, non-manufacturing figures on
Wednesday and unemployment claims on Thursday. The job numbers are impossible
to predict but a positive reading always seems helps strengthen the dollar.
We could also see some movement following the European Central Bank statement on Thursday. Last month Mario Draghi said the ECB were ready to act with extra stimulus as early as June and if we get any indication of this later in the week we could see some safe-haven flows into the dollar. This will strengthen the greenback and in turn drive down the GBP/USD cross.
