The British Pound Sterling (Currency:GBP) faces another exciting day of trade on Friday. We hear of an improving economic outlook for the UK while we look forward to the next PMI release and US Non-Farm Payroll data out in early afternoon London time.

Highlights:
@8:15: NIESR ugrades outlook for UK economy
@9:36: Sterling shoots higher as Construction PMI surges
@14:01: Sell EUR/GBP

15:45: Monday brings Services PMI

Can Monday's PMI release allow the nascent sterling rally to continue?

Analysts are expecting a reading of 57.4 - an improvement on last month's 56.9.

However, following the two strong consensus beating releases (See @ 9:30 below) we would imagine traders are factoring in a beat. So, Services PMI will have to come in well above expectations for the GBP rally to enjoy fresh legs.

15:20: Strong advances by GBP

The latest wholesale spot rates:

• The GBP/EUR is 0.37 pct higher on a daily basis at 1.1491.
• The GBP/USD is 0.9 pct higher at 1.5257.
• The GBP/AUD is 0.96 pct higher at 1.7108.
• The GBP/NZD is 1.4 pct higher at 1.9435.
• The GBP/CAD is a percent higher at 1.5806.

Please Be Aware: The above are spot wholesale market quotes to which your bank will charge a discretionary spread. However, an independent FX provider will guarantee to undercut your bank's offer, thus delivering more currency. Please learn more here .

14.01: Euro Pound Exchange Rate is a Sell

Leander Dreyer at Jyske Bank reminds us to not forget the long-term picture facing the Euro/Pound exchange rate:

"We recommend SELL EUR/GBP with S/L at 0.8825. Over the past five years, EUR/GBP has remained below the red trend line with five points of support. It will require something extraordinarily for investors to breach the long-term trend.

"The recent positive development in the UK economic indicators supports GBP. The rising interest rates in the US is also a greater advantage for GBP than for EUR." (Be aware that Dreyer has 0.8835 as SL on the chart below).
(click to enlarge)



Are you looking to back this call? See how the best traders on the world's largest social trading setup are playing the EUR and GBP. Identify the best, follow them and copy them to increase your chances on the FX markets. Learn more here.

13:30: Sterling surges higher versus US Dollar

The GBP/USD has shot up by 0.7 pct following the release of the US Non-Farm Payrolls. The exchange rate is trading at 1.5220 at 13:33.

The EUR/USD has shot higher and is 0.4 pct up at 1.3257.

NFP July figure released at 161K, Forecast: 189K, Previous at 202 K.

A big disappointment if we consider the comment below @13:15.

13:15: A looming disaster for the USD at 13:30

Matt Weller at GFT says:

"My twitter feed is blowing up with 200k+ NFP guesses - Potential for a disaster if we print < 170k. Not likely, but worth noting!"

11:51: GBP/USD prone to head lower, but event risk ahead

Our latest insights into the GBP/USD pair show the pair prone to further losses. We have some serious event risk ahead though. Read our latest report on the matter here .

11:07: We eagerly await next week's Services PMI

Today's strong Construction PMI (See below @9:30) follows on from yesterday's strong Manufacturing PMI reading.

Leander Dreyer at Jyske Bank tells us what he (and we suspect most other traders) is really looking forward to is the release of next week's Services PMI release:
"UK economic indicators continue their positive trend. PMI Industry powered ahead at 54.6 compared to expectations of 52.8. All sub-components showed a very positive development, which bodes well for Q3 in the UK.

"Although PMI Industry only accounts for around 16-18% of the UK economy, further advance in the industry will soon be able to spread to the  service sector and, thus, the entire economy.

"We eagerly await the announcement of service sector data on Monday, as a fair advance will support the currently weak GDP."

10:51: EUR/GBP forecasted higher

Some technical insights into the EUR/GBP have just been released - the euro remains in favour despite today's dip in EUR/GBP. Read the insight here.

9:36: UK PMI Construction SURGES!

This is a massive beat for GBP:

"The UK PMI Construction jumped to 57 In July from 51 in June, the Chartered Institute of Purchasing & Supply and Markit Economics reported today. This result considerably exceeds expectations of an increase to 51.6 and is the highest since June 2010 when it stood at 58.4," say FXStreet.

This has boosted sterling:

• GBP/EUR = 0.21 pct higher at 1.1473 (What will it take to crack 1.15?!).
• GBP/USD = 0.3 pct up at 1.5165.
• GBP/AUD = 0.64 pct higher at 1.7051 (1.7 broken!).

8:50: Today's outlook dominated by Construction PMI, Non-Farm Payrolls

Yesterday the British Pound Sterling (Currency:GBP) received a boost from a consensus-beating reading from the UK Manufacturing PMI .

Can the Construction PMI deliver today? Consensus estimates are for 51.6, up from last month's 51.

We warned that we would need to see a rather significant beat (close to 52?) for sterling to get a kick higher.

The big event for markets comes at 13:30. Can positive market momentum be maintained?

Lloyds Bank Research say:

"The change in July’s US non-farm payrolls are forecast at 190k in July, slightly below the 195k in June and consistent with our current view on tapering. Despite the recent stronger than expected continuing claims, ADP employment, and yesterday’s July ISM manufacturing survey data, we see the risks to our non-farm payroll forecast as fairly balanced.

"Meanwhile, we forecast the unemployment rate to fall from 7.6% in June to 7.5% in July, as gains in the household survey are partially offset by  a rise in the participation rate."

8:37: Sterling advances against the commodity currencies (CAD, AUD, NZD etc)

• The Pound to Euro exchange rate is flat on Thursday's closing level at 1.1450.
• The Pound to US dollar exchange rate is 0.09 pct higher at 1.5134.
• The Pound to Australian dollar exchange rate is 0.27 pct higher at 1.6991.
• The Pound to Canadian dollar exchange rate is 0.41 pct higher at 1.5713.

Please Be Aware: The above are spot wholesale market quotes to which your bank will charge a discretionary spread. However, an independent FX provider will guarantee to undercut your bank's offer, thus delivering more currency. Please learn more here .

8:15: NIESR upgrades outlook for UK economy

The outlook for the British pound has improved from a long-term perspective as the NIESR (National Institute of Economic and Social Research).

The NIESR revised up its economic growth forecasts for both 2013 and 2014 by 0.3 percentage points to 1.2 percent this year and 1.8 percent next year.

"The main cause of the improvement in the economic growth outlook is a rise in the prospects for consumer spending growth," NIESR said.