Due to strong demand for US dollars, GBP/USD is still under pressure and has declined for the fourth consecutive session.
The US Dollar Index reached its highest level in a week at 98.50, indicating a broad strengthening of the greenback due to positive PMI data.
Fed Chair Powell's speech on Friday kicks off the Jackson Hole Symposium.
On Thursday, the British pound (GBP) continues to fall against the US dollar (USD) for the fourth day in a row, falling below the 1.3450 mark. Due to divergent economic signals and a stronger greenback, the pair is currently trading close to 1.3435.
Following the positive Purchasing Managers Index (PMI) data, the US dollar gained strength overall. The US Dollar Index (DXY), which measures the value of the US dollar relative to a basket of major currencies, surged to a new weekly high of over 98.50.
The August preliminary S&P Global PMI surveys showed that the US economy was gaining significant momentum. While the Manufacturing PMI surged to 53.3, a dramatic recovery from 49.8 in July and much above the prediction of 49.5, signaling a return to expansion, the Composite PMI increased to 55.4, marginally higher than July's 55.1. The Services PMI, which showed continued improvement in the sector, came in at 55.4, down slightly from 55.7 in July but still exceeding forecasts of 54.2.
Data from the labor market painted a different image. In the most recent week, initial unemployment claims increased to 235,000, beyond forecasts of 225,000 and the previous 224,000. This was an eight-week high and another evidence that the labor market is slowly cooling.
In addition, the August Philadelphia Fed Manufacturing Survey unexpectedly shrank to -0.3, compared to the July reading of 15.9 and the market's expectations of 7.
The S&P Global Composite PMI preliminary reading for August in the UK increased to 53.0, the highest level since April and higher than the 51.5 reading for July. The primary driver, services activity, increased to 53.6, which was unchanged from July and higher than the forecast of 51.8. However, manufacturing declined much further, missing the 48.3 prediction and dropping from 48.0 in July to 47.3. The data shows that the UK economy is recovering due to services, but manufacturing is still in deeper decline, which puts pressure on the pound.
The focus now shifts to Friday's speech by Federal Reserve (Fed) Chair Jerome Powell at the Jackson Hole Symposium. His comments could determine the US dollar's short-term course and will be widely followed for hints about the Fed's monetary policy stance.
The current price of sterling in pounds
The US Dollar Index reached its highest level in a week at 98.50, indicating a broad strengthening of the greenback due to positive PMI data.
Fed Chair Powell's speech on Friday kicks off the Jackson Hole Symposium.
On Thursday, the British pound (GBP) continues to fall against the US dollar (USD) for the fourth day in a row, falling below the 1.3450 mark. Due to divergent economic signals and a stronger greenback, the pair is currently trading close to 1.3435.
Following the positive Purchasing Managers Index (PMI) data, the US dollar gained strength overall. The US Dollar Index (DXY), which measures the value of the US dollar relative to a basket of major currencies, surged to a new weekly high of over 98.50.
The August preliminary S&P Global PMI surveys showed that the US economy was gaining significant momentum. While the Manufacturing PMI surged to 53.3, a dramatic recovery from 49.8 in July and much above the prediction of 49.5, signaling a return to expansion, the Composite PMI increased to 55.4, marginally higher than July's 55.1. The Services PMI, which showed continued improvement in the sector, came in at 55.4, down slightly from 55.7 in July but still exceeding forecasts of 54.2.
Data from the labor market painted a different image. In the most recent week, initial unemployment claims increased to 235,000, beyond forecasts of 225,000 and the previous 224,000. This was an eight-week high and another evidence that the labor market is slowly cooling.
In addition, the August Philadelphia Fed Manufacturing Survey unexpectedly shrank to -0.3, compared to the July reading of 15.9 and the market's expectations of 7.
The S&P Global Composite PMI preliminary reading for August in the UK increased to 53.0, the highest level since April and higher than the 51.5 reading for July. The primary driver, services activity, increased to 53.6, which was unchanged from July and higher than the forecast of 51.8. However, manufacturing declined much further, missing the 48.3 prediction and dropping from 48.0 in July to 47.3. The data shows that the UK economy is recovering due to services, but manufacturing is still in deeper decline, which puts pressure on the pound.
The focus now shifts to Friday's speech by Federal Reserve (Fed) Chair Jerome Powell at the Jackson Hole Symposium. His comments could determine the US dollar's short-term course and will be widely followed for hints about the Fed's monetary policy stance.
The current price of sterling in pounds
