- GBP/USD stands at 1.3305 as the US dollar slightly retreats, up by 0.07%.
- The US ISM Services PMI has dipped to 50.1, falling short of the 51.6 expectation.
- The market suspects that the firing of the BLS chief and Coogler’s resignation have affected the credibility of the data.
- The BoE anticipated a 90% probability of reducing rates to 4% during the meeting on August 7.
During the North American trading session, GBP/USD saw a slight increase of over 0.07% after last week’s disappointing jobs report and other weak data. Currently, it is trading at 1.3305.
Sterling finds strength in US ISM data uncertainty following key resignations
Recent economic activity data indicates that the services sector in the US, as reported by the Institute for Supply Management (ISM), saw its PMI decline from 50.8 to 50.1. This result was well below the anticipated increase to 51.6. Additionally, earlier reports indicated a significant reduction in the US trade deficit, reaching its lowest point in nearly two years.
However, the sentiment in the market has soured following the dismissal of the Director of Labor Statistics (BLS), with traders expressing skepticism about future economic data reliability. The unexpected resignation of Federal Reserve Governor Adriana Kugler only compounded this uncertainty regarding the Federal Reserve’s independence and the accuracy of economic data.
In light of these events, US President Donald Trump has stated he is not interested in nominating Scott Bescent as the next Fed Chairman.
Across the Atlantic, the UK’s S&P Global Services PMI dropped to 51.8 in July from 52.8, primarily due to a fall in new orders, marking the steepest decline since November 2022. Traders are now focusing on the Bank of England’s monetary policy decision scheduled for August 7.
GBP/USD price forecast: Technical outlook
From a technical standpoint, GBP/USD appears poised to stabilize around 1.3300, which may approach the 100-day SMA, with peaks of 1.3330 and 1.3369 observed on August 4. Although the relative strength index (RSI) suggests a potential upward movement, it remains below the neutral line, indicating that a rise could attract sellers into the market.
The primary support level for GBP/USD is at 1.3300, while the next significant threshold can be seen at the cycle low of 1.3141 reached on August 1.
UK pound exchange rates against major currencies this week indicate it performed strongest against the Swiss franc.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.10% | -0.19% | 0.16% | 0.02% | 0.13% | 0.19% | 0.24% | |
| EUR | -0.10% | -0.25% | 0.09% | -0.08% | -0.10% | 0.08% | 0.12% | |
| GBP | 0.19% | 0.25% | 0.33% | 0.17% | 0.15% | 0.33% | 0.37% | |
| JPY | -0.16% | -0.09% | -0.33% | -0.15% | -0.18% | 0.02% | 0.23% | |
| CAD | -0.02% | 0.08% | -0.17% | 0.15% | -0.04% | 0.18% | 0.20% | |
| AUD | -0.13% | 0.10% | -0.15% | 0.18% | 0.04% | 0.19% | 0.22% | |
| NZD | -0.19% | -0.08% | -0.33% | -0.02% | -0.18% | -0.19% | 0.02% | |
| CHF | -0.24% | -0.12% | -0.37% | -0.23% | -0.20% | -0.22% | -0.02% |
The heatmap depicts the rate of change amongst major currencies. The base currency is selected from the left column, and the currency for comparison is chosen from the top row. For instance, choosing the British pound from the left and moving to US dollars reflects the interchange rate shown in the relevant box.
