GBP/USD Exchange Rate Dips on Solid US Payroll Report
UPDATE: The Pound Sterling to US Dollar (GBP/USD) exchange rate is on the back foot this afternoon, having fallen around half a cent to a low of $1.3032 following the release of the latest US non-farm payrolls.
The data revealed that payrolls saw a solid rebound last month, jumping from 20,000 to 196,000, beating expectations and helping to dispel fears of a slowdown in the US economy.
Instant View: U.S. March payrolls rebound more than expected https://t.co/1kqbZLV4Ag pic.twitter.com/WDXUArF4nf
— Reuters Business (@ReutersBiz) April 5, 2019
Applying further pressure to the GBP/USD exchange rate this afternoon was also the news that France was opposed to granting another Brexit extension unless the UK presents a credible plan that would be able to make it through parliament.
GBP/USD Exchange Rate Flat as May-Corbyn Brexit Talks Set to Continue
The Pound Sterling to US Dollar (GBP/USD) exchange rate is rangebound this morning as Sterling enters a holding pattern ahead of a second round of talks between Theresa May and Jeremy Corbyn as they attempt to come up with a workable Brexit solution.
At the time of writing the GBP/USD exchange rate is virtually unchanged, leaving the pairing trading at $1.31.
Pound (GBP) Steady as PM Meets Opposition Leader for Brexit Talks
The Pound (GBP) is trading in a narrow range against the US Dollar (USD) and the majority of its other peers this morning with investors remaining wary of the UK currency as the Conservative and Labour teams continue talks in an effort to break the Brexit deadlock in Parliament.
The first set of talks between Theresa May and Jeremy Corbyn were described as ‘constructive’ yesterday, with the two reportedly agreeing to a ‘programme of work’ to try and find a way forward.
GBP investors are hopeful that the two sides will be able to come up with a plan that could win the support of the majority of MPs and help clear up some of the uncertainty that is hanging over the whole process
However, both leaders have faced criticism from their own parties and it remains unclear what, if any, agreement May and Corbyn will be able to reach that will appease MPs, who are increasingly split on how to proceed with Brexit.
Demand for the US Dollar (USD) Tempered by Risk Rally
At the same time, the US Dollar (USD) is struggling to find momentum this morning as demand for the safe-haven currency is capped by rising risk sentiment.
This comes after speculation that the US and China may be close to signing off on a trade deal, following reports that negotiations are progressing well as talks resumed in Washington.
Reports suggest the two sides will soon sign off on a deal which will see China committing to purchase more US commodities and allow 100% foreign ownership for US companies operating in the country by 2025.
Combined with a recent run of soft US data, this has greatly limited demand for the US Dollar throughout this week’s session and leaves the USD/GBP exchange rate trade close to a one-week low.
GBP/USD Exchange Rate Forecast: Will a Rebound in Payrolls Bolster the US Dollar?
Looking ahead, the tail end of the week could see the Pound US Dollar (GBP/USD) exchange rate fall back with the release of the latest US non-farm payrolls report.
After adding just 20,000 jobs in February, economists forecast that the US workforce will have expanded by a healthy 180,000 last month.
However it remains to be seen if this will be enough to excite USD investors given such a reading is still fairly modest compared to the last twelve months.
Meanwhile, expect to see Brexit remain the number one priority for GBP investors, with the Pound likely to remain highly sensitive to any further developments.
However also potentially influencing Sterling at the very end of the week will be the Halifax’s UK House Price Index, as analysts forecast prices will have contracted sharply last month after surging in February.