This is a fraction below the week’s current GBP/USD exchange rate high of $1.317 and comes after a decline in the UK’s manufacturing sector activity reading.

July’s UK manufacturing PMI has dropped from 54.4 points to 54, below forecasts for a 54.2 point reading.

Any reading above 50 means the sector is growing, but this figure still represents a slowdown.

Seeing this result as symptomatic of difficulties in the UK manufacturing sector, Markit Director Rob Dobson said: “UK manufacturing started the third quarter on a softer footing, with rates of expansion in output and new orders losing steam.

“The upturn in the sector has eased noticeably since the back-end of 2017, meaning that manufacturing has failed to provide any meaningful boost to headline GDP growth through the year-so-far.”

On the other side of the pairing, the US dollar has remained steady against the pound on uncertainty surrounding this evening’s Federal Reserve interest rate decision.

The Fed is pencilled in to hike interest rates twice more in 2018, but just when these supposed rate hikes will occur is still a matter for debate.

Strong US economic data raises the odds of a near-term Fed interest rate hike but there are concerns that ongoing international trade disputes could stay the Fed’s hand.

The next set of economic data which could affect the pound US dollar pairing will come from the US, consisting of employment, PMI and Federal Reserve news.

Taking these in order, the US dollar could initially rise against the pound if this afternoon’s ADP employment change shows a forecast-matching rise for July’s reading.

Later manufacturing PMIs may prove less supportive, as Markit and ISM are predicted to report rising and falling levels of sector activity, respectively.

Rounding off today’s US news will be the evening’s Federal Reserve interest rate decision, which is expected to see an interest rate freeze at 2 per cent.

Despite the likelihood of no action on interest rates, the US dollar could still appreciate if it looks like another near-term hike is likely.

Beyond today’s US ecostats, there could be high pound US dollar exchange rate volatility on Thursday’s Bank of England (BoE) interest rate decision.

The UK central bank is expected to hike interest rates from 0.5 per cent to 0.75 per cent, which could trigger a surge in pound trader confidence and boost Sterling’s value.

Such an outcome isn’t guaranteed, however, so there may end up being heavy pound US dollar exchange rate losses if BoE officials leave interest rates unchanged.

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