GBP/USD Edges Lower as UK Employment Rate Holds Record High

Pound US Dollar (GBP/USD) Exchange Rate Slips despite UK Unemployment Unchanged at 44-Year Low

UPDATE: The Pound Sterling US Dollar (GBP/USD) exchange rate edged down on Tuesday, and the pairing is currently trading at an inter-bank rate of $1.3081.

Data revealed that the UK employment rate soared to a record high of 76.1%, however this did not prevent the Pound from slipping against the ‘Greenback’.

UK unemployment remained unchanged at a 44-year low of 3.9%.

February’s unemployment data signals that the recent Brexit pessimism did not cause job losses in the three months leading to February.

Pound US Dollar (GBP/USD) Exchange Rate Rises as US Manufacturing ‘Fairly Subdued’

UPDATE: The Pound Sterling US Dollar (GBP/USD) exchange rate rose and the pairing is currently trading at an inter-bank rate of $1.3111.

Data released this afternoon revealed that while the US Empire State Manufacturing Index rebounded in April, growth was still subdued.

The index rose from a two-year low of 3.7 in March to a higher-than-forecast 10.1.

The New York Fed said on Monday that while factory production picked up in New York State, it remained ‘fairly subdued’, which likely weighed on the ‘Greenback’

Pound US Dollar (GBP/USD) Exchange Rate Rises despite Pessimistic Business Outlook

UPDATE: The Pound Sterling US Dollar (GBP/USD) exchange rate has risen as risk appetite weighed on the US Dollar.

The pairing is currently trading at an inter-bank rate of $1.3101.

On Monday, accountancy firm Deloitte said that a growing number of large British-based businesses are prioritising cash flow.

Fears of the long-term economic impact of Brexit has darkened to its most negative, with 81% of Chief Financial Officers surveyed expect Brexit to lead to deterioration of long-term business environment.

This was the highest percentage since the survey was first asked at the time of the Brexit referendum in June 2016.

However, this could do little to stop Sterling from rising against the US Dollar on Monday.

Pound US Dollar (GBP/USD) Exchange Rate Bolstered as US-China Trade Talks Spark Global Risk Appetite

The Pound Sterling US Dollar (GBP/USD) exchange rate has edged up today as risk appetite increases, and the pairing is currently trading at an inter-bank rate of $1.3100.

Traders are refocusing on the US-China trade discussions, with markets welcoming some upbeat comments from US Treasury Secretary Steven Mnuchin this weekend.

Mnuchin’s comments boosted risk appetite amongst traders, which caused the safe-haven US Dollar to slide against Sterling.

Signaling that further face-to-face talks could be in the near-future, Mnuchin told reporters in Washington that ‘we’re hopefully getting very close to the final round of these issues.’

Commenting on the progress made, Mnuchin said:

‘There are certain commitments that the United States is making in this agreement and there are certain commitments that China is making.

‘I would expect that the enforcement mechanism works in both directions, that we expect to honour our commitments, and if we don’t, there should be certain repercussions, and the same way in the other direction.’

Pound (GBP) Edges Up on a Resilient UK Housing Market

The UK housing market received a spring boost, as there were tentative signs that the market is remaining robust in 2019, although there were some weak spots.

In particular, the Rightmove house price index found that asking prices in Greater London fell for the 20th month in a row, as the market remains clouded by political uncertainty.

Annually, Rightmove found that house prices fell by -0.1% compared to last year.

However, house prices of new-to-market properties increased by an average of 1.1%, the largest month-on-month rise for over a year.

Commenting on the data, Miles Shipside, Rightmove Director and Housing Market Analyst said:

‘The rise in new seller asking prices reflects growing activity as the market builds momentum, egged on by the arrival of Easter.

‘Some sectors of the market and some parts of the country have strong buyer demand and a lack of suitable supply.’

Sterling (GBP) Rises as Cross-Party Talks Continue

On Sunday, comments about the progress of the cross-party Brexit discussions in the UK likely sparked some fresh optimism.

Cabinet Minister David Lidington said that the government and Labour are ‘testing out’ each other’s ideas in an attempt to break the Brexit deadlock that has plagued the country.

Speaking to the BBC, Lidington said that the two sides had a ‘fair bit in common’ when it came to customs objectives, although further compromise was still needed.

These cross-party talks do not have a set deadline, however it is said that the two sides would ‘take stock’ in ten days, and this process would not be dragged out.

Pound US Dollar Outlook: Will the GBP/USD Exchange Rate Fall as Unemployment Rises?

Looking ahead to Tuesday, the Pound (GBP) could slide against the US Dollar (USD) following the release of the UK latest unemployment rate.

If data reveals that unemployment rose from 3.9% to 4% or more in February, sentiment in Sterling could be dampened.

On Tuesday afternoon, the US Dollar could receive an upswing in support following the release of March’s industrial production data.

If industrial production rises by 0.3% or more as forecast, the Pound US Dollar (GBP/USD) exchange rate could slide.

Millie Empson

Contact Millie Empson