Pound Surges as Weaker US Data Boosts GBP/USD Exchange Rate
The Pound to US Dollar exchange rate has been on an upward trend in recent days, reaching a 15-day high last week. This is attributed to investors scaling back Federal Reserve rate hike expectations following softer US economic data and the latest central bank decisions.
At the time of writing, GBP/USD was trading around $1.3483, up approximately 1% over the week. The weakening US Dollar has contributed to this trend, as a cautious market mood boosted demand for safe-haven currencies earlier in the week.
The Federal Reserve's decision to leave interest rates unchanged by a 9-3 vote and adopting a broadly neutral tone also helped scale back expectations for further Fed interest rate hikes this year. This move triggered broad-based US Dollar weakness.
However, if both the US ISM manufacturing and services PMIs on Monday and Wednesday indicate improving business activity, the US Dollar could regain some support. The week's key release will be Friday's US non-farm payrolls report, which could revive support for the Greenback with a stronger-than-expected increase in employment.