- GBP/USD steadies as traders adopt caution ahead of Fed Chair Jerome Powell’s speech at the Jackson Hole Symposium.
- The preliminary S&P Global US Composite PMI inched higher to 55.4 in August, from 55.1 prior.
- The UK GfK Consumer Confidence improved to -17 in August from -19 in July.
GBP/USD moves little after four days of losses, trading around 1.3410 during the Asian hours on Friday. The pair faced challenges as the US Dollar (USD) gained ground following the key economic data from the United States (US) released on Thursday. Traders await Fed Chair Jerome Powell’s speech at the Jackson Hole Symposium in Wyoming to gain clues on the September policy outlook.
The preliminary S&P Global US Composite PMI picked up pace in August, with the index at 55.4 versus 55.1 prior. Meanwhile, the US Manufacturing PMI rose to 53.3 from 49.8 prior, surpassing the market consensus of 49.5. Services PMI eased to 55.4 from 55.7 previous reading, but was stronger than the 54.2 expected. Moreover, US Initial Jobless Claims rose to 235K for the previous week, an eight-week high and above the consensus estimate of 225K, suggesting some softening in labor market conditions.
Strong PMI data paired with rising jobless claims highlights the Federal Reserve’s challenge of weighing persistent inflation pressures against evidence of a softening labor market. According to the CME FedWatch tool, Fed funds futures traders are now pricing in a 74% chance of a rate reduction in September, down from 82% on Wednesday.
Federal Reserve (Fed) Bank of Chicago President Austan Goolsbee said late Thursday that September’s Fed meeting remains open for action. Goolsbee further stated that the Federal Reserve has been receiving mixed signals on the economy. Boston Fed President Susan Collins signaled openness to a rate cut as soon as September, citing tariff headwinds and potential labor market softness, even as near-term inflation risks persist.
The GfK Consumer Confidence in the United Kingdom (UK) rose to -17 in August from -19 in July, marking a one-year high amid support from the Bank of England’s (BoE) rate cut. Yet, sentiment remains fragile as households contend with sticky inflation, higher unemployment risks, and looming tax hikes.
