Pound to US Dollar Rate Goes Beyond the Key Level

As Friday came to a close, the Pound to US Dollar rate brushed aside the key level of resistance of $1.40 by reaching $1.4005 according to the Foreign Exchange Market.

Furthermore, exchange rates strengthened thanks to the latest PMIs which indicate that the service sector contracted less than expected. This helped to ease the concerns around the drop in sales figures and this saw the Pound also strengthen against the Euro, finishing the week at €1.1558.

The Euro ended the week in a better position after the preliminary manufacturing PMI reached a three-year high. Along with this, it also took advantage of the weakening US Dollar due to the negative correlation between the two currencies. The German business climate index today could provide further support to the Euro as business confidence increased.

There were further losses for the US Dollar for the second day running, with investors seeking a broad US Dollar sell-off. An improvement in market sentiment meant that demand for the Greenback was limited. For the week ahead, the next US stimulus package will be the main focus for investors as the currency could struggle should the package need to be lessened slightly.


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