British GBP/USD Exchange Rate Today: GBP/USD Could Find Relief if US NFP Data Disappoints

Data aside though, forecasters are predicting near-term weakness in the sterling dollar to persist as momentum indicators continue to favour the USD over the GBP in the near- to medium-term.

The following currency rates are observed:

• The pound to dollar exchange rate (GBP/USD) is unchanged on a daily basis at 1.6887. The pair has now broken through both the 1.7 and 1.69 support points suggesting the pair is prone to further declines.
• The euro to dollar exchange rate (EUR/USD) is 0.05 pct down at 1.3383.
• The US to Canadian dollar exchange rate (USD/CAD) is 0.20 pct higher at 1.0929.

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US releases take centre stage for foreign exchange markets today

Focus will be on US non-farm payroll data due for release this afternoon.

"While ADP employment just missed market expectations coming in at 218k, it still supports market expectations for a sixth consecutive 200k+ payrolls number," say Lloyds Bank Research.

Furthermore, the continued down trend in the weekly jobless claims points to another big gain believe Lloyds.

Could markets be a little too optimistic? If this is the case and there is a sense of disappointment regarding the data then watch the GPB/USD rally in relief.

Mid-week data goes the way of USD

The ADP figure disappointed by coming in at 218K, analysts had hoped for 230K.

But it was the release of strong GDP numbers that got the dollar rallying; Gross Domestic Product Annualized (Q2) came in at 4%, well ahead of the expectation for a reading of 3%.

Ahead, we have the FOMC meeting.

"The FOMC meeting perhaps poses the least amount risk of a surprise given there will be no press conference or updated staff projections," suggest Lloyds Bank Research in a currency brief.

However, the market will likely scrutinise the statement for any slight changes in monetary policy tone.

Lloyds reckon though that ADP and Q2 GDP pose greater uncertainty for the USD.

"Another decent rise in employment is expected in July following the firm print seen in June. The market will likely take this number as a gauge as to what to expect for Friday’s payrolls," say Lloyds.

However, exchange rate market reaction to ADP maybe relatively confined until the release of Q2 GDP which follows shortly after.

"A rebound in economic activity is expected in Q2 after the weather affected weak Q1 print. It’s unclear how strong the rebound will be. Our economists forecast a firmer rebound of 3.5% q/q saar compared to market consensus of 3.0%" says the currency note from Lloyds.

Annual benchmark revisions will also be released, adding to the uncertainty surrounding these numbers.

USD reaction will be dependent on any revisions to previous quarters as well as the first estimate of Q2 GDP.

The British pound: A second-calss passenger

There are no economic data events due out of the UK economy until Friday when the new month brings with it new data releases.

Until then the soft tone in GBP is likely to persist with the GBP/USD in particular tipped to feel the heat.

"GBP/USD came under pressure yesterday as 2y relative rate spreads continued to move against GBP despite some firmer than expected mortgage approvals data. For today, with little on the UK calendar GBP/USD will be dependent on this afternoon’s US releases," say Lloyds.