The Pound Sterling (GBP) edged lower against the US Dollar (USD) in early European trading on Wednesday, with GBP/USD slipping to around 1.3510. The move came after the latest UK S&P Global flash PMI figures for September revealed weaker-than-expected economic activity. Traders now await remarks from Bank of England (BoE) External Member Megan Greene, due later in the day.
UK private sector growth cooled in September, with the Composite PMI dropping to 51 from 53.5 in August, well below the market forecast of 52.7. Manufacturing activity contracted further, as the Manufacturing PMI slipped to 46.2 from 47.0. The Services PMI also lost momentum, falling to 51.9 from 54.2 in the previous month.
Commenting on the data, Chris Williamson, Chief Business Economist at S&P Global Market Intelligence, highlighted “weakening growth, slumping overseas trade, worsening business confidence and further steep job losses” as concerning signals from the survey.
Meanwhile, the US Dollar held firm after Federal Reserve Chair Jerome Powell noted on Tuesday that policymakers face a “challenging situation” of balancing inflation risks with a slowing labor market. Powell stressed that current interest rates are “in a good place” to address both issues, signaling no urgency for aggressive cuts. His cautious remarks lent support to the greenback.
Looking forward, market focus will shift to the US Personal Consumption Expenditures (PCE) Price Index due Friday. A softer-than-expected reading could weigh on the USD, offering some relief to GBP/USD. Until then, the pair is likely to remain sensitive to central bank commentary and broader risk sentiment.
