The Pound Sterling holds its ground during the North American session on Tuesday, following reports indicating a slowdown in business activity across the Atlantic in September, as reflected in the Flash Purchasing Managers Indices for both the UK and the US. The GBP/USD is currently positioned at 1.3518, showing minimal movement.
The US Manufacturing PMI decreased to 52.0, while the Services PMI fell to 53.9, as tariffs contribute to increased price pressures. The UK Composite PMI decreased to 51.0, falling short of expectations, with significant slowdowns observed in both services and manufacturing sectors. The divergence in policy between the Fed and the BoE supports a potential increase in GBP, although concerns regarding UK fiscal matters restrict the near-term bullish prospects for Cable.
> Sterling remains resilient in the face of disappointing UK and US PMIs; the divergence in central bank policies supports GBP, yet fiscal risks limit potential gains : The Dollar appears to have stabilized, with the US Dollar Index, which assesses the currency’s value against a group of six counterparts, rising 0.08% to 97.38. Recent data indicates that business activity in the US has experienced a slowdown for the second consecutive month. The Manufacturing PMI decreased to 52.0, down from 53.0 in August. The Services index experienced a decline, dropping from 54.5 to 53.9 in September. Upon thorough examination of the report, it is evident that the survey of prices paid increased from 60.8 last month to 62.6, with companies identifying tariffs “as the principal cause of further cost increases.” Currently, market participants are focused on Fed Chair Jerome Powell’s speech regarding the economic outlook, scheduled for approximately 16:30.
Reports says that the Composite Purchasing Managers’ Index for the services and manufacturing sectors decreased to 51.0 in September, down from 53.5 in August, falling short of economists’ estimates of 53.0. Despite this, the GBP/USD has shown resilience, with Sterling appreciating 8% against the Dollar this year.