Pound vs US dollar foreign exchange rate: Outlook for GBP/USD is sketchy with UK construction PMI unable to reassert upside pressur
The pound sterling to US dollar exchange rate is trading unchanged on last night; GBP/USD is quoted at 1.6195.
The US dollar to pound sterling is thus at 0.6175.
BE AWARE: The above are spot market quotes. Your bank will affix their own spread when passing on a retail offer. However, an independent FX provider will guarantee to undercut your bank's offer, thus delivering more currency. Please find out more here.
Construction PMI underwhelms
At the time of writing markets are digesting the release of September's UK Construction PMI data.
The number read at 58.9, below forecasts for 59.2.
It is also below August's reading at 59.1.
That said, Sterling is unmoved against the US dollar on the reading suggesting to us currency markets remain happy with the the sheer overall strength of the number.
Outlook for British pound vs US dollar today
We hear from Emmanuel Ng at OCBC Bank who advises that he considers the GBP/USD exchange rate to be overextended: (Note our report yesterday on Deutsche Banks predictions that the US dollar comeback was immintent).
"Sterling continues to push higher at the expense of the Dollar, but is looking over-extended. The 1.63 area offers potential resistance and the opportunity to cover longs or possibly initiate short trades."
However, analysts at ICN Capital Markets have today told clients that the potential for a return to the upside remains:
"The pair dropped but remained limited above 88.6% correction at 1.6170, as stabilising above this level force us to keep our positive outlook.
"Linear Regression Indicators are positive supporting the possibility of bringing the upside move back. Of note, breaking 16100 and stabilising below it could weaken our intraday positive expectations today.
"The trading range for today is among the key support at 1.6010 and key resistance at 1.6420."
US government shutdown dominates US dollar trading
The major theme for foreign exchange markets today remains the US government shutdown which has ensured US non-farm payrolls for this month are cancelled.
This is big news for global financial markets and plays US dollar negative.
We knew it was highly likely but it is now confirmed.
Jonathan Pryor, Corporate Treasury Analyst at Investec comments on the cancellation of this month's all-important non-farm payroll release.
“The US Bureau of Labor Statistics confirmed it will not collect or issue economic data during the government shutdown which means the pivotal Non-Farm Payrolls data that were due to be delivered on Friday will be suspended.”
“The implication of this could be significant because if the shutdown runs into a second week, the US data releases will not provide a complete picture of the health of the US economy and thus cause further uncertainty around tapering at the end of the year.”