All eyes on US non-farm payrolls & Thursday’s ECB meeting
Daily Currency Update
Pound to Dollar exchange rates looks to trend higher, as U.S. job data and tariff news continues to be the focus.Sterling stumbled as UK manufacturing PMI dipped to 45.1 in May, marking the steepest contraction in output and employment since 2020 . This downturn underscores the challenges facing the UK's industrial sector amid global economic uncertainties.
Across the Atlantic, the US ISM Manufacturing PMI edged up to 49.3 in May, surpassing expectations and suggesting a modest rebound in factory activity. However, the reading remains below the expansion threshold, indicating ongoing softness in the manufacturing sector. Expect a week of a packed US data, with Friday’s Non-Farm Payrolls looming large.
Key Movers
In the Eurozone, the European Central Bank is poised for its eighth consecutive rate cut on Thursday 5th of June, with a 25 basis point reduction anticipated to bring the deposit rate to 2.0%. This move reflects the ECB's response to easing inflation and sluggish economic growth.The U.S. dollar remains steady ahead of the Non-Farm Payrolls report due on June 6, with expectations of a slowdown in job growth to 130,000 in May. Additionally, Federal Reserve Governor, Christopher Waller, indicated potential interest rate cuts later in 2025, contingent on continued progress toward the 2% inflation target and a stable labour market.
Expected Ranges
- GBP/USD: 1.3460 - 1.3560 ▲
- GBP/EUR: 1.1835 - 1.1890 ▲
- GBP/AUD: 2.091 - 2.102 ▼
- EUR/USD: 1.1410 - 1.1490 ▼