GBP/USD Exchange Rate Edges Higher on Boris Johnson Recovery Hopes
The Pound to US Dollar (GBP/USD) exchange rate rose by 0.2% despite today’s release of March’s UK Construction PMI, which slumped to a worse-than-expected 39.3. The pairing is currently trading around $1.23.
Duncan Brock, the Group Director at the Chartered Institute of Procurement and Supply, commented on the report:
‘As measures to contain the coronavirus COVID-19 pandemic were put in place across the UK, construction sites closed and builders lost their jobs on a frightening scale as overall activity fell to an extent not seen since April 2009. New orders were reduced to a trickle as the scale of the disease dawned on clients and lockdown severely hindered any further progress.’
The UK’s consumer confidence has also plummeted amid the nationwide lockdown. The GfK consumer morale gauge fell to -35 in March in its biggest single drop since the survey’s history. However, this failed to drag down the GBP/USD exchange rate.
Sterling recovered following Prime Minister Boris Johnson’s admittance to hospital for oxygen treatment. Hopes now rising that he’ll soon be returning to Downing Street.
UK Housing Minister Robert Jenrick said that the admission had not been an ‘emergency’, and that he expects him to return to his normal duties shortly.
US Dollar (USD) Sinks as US Heads for ‘Peak’ Coronavirus Crisis Period
The US Dollar (USD) fell against the Pound (GBP) as the US heads towards its ‘peak’ period amid the coronavirus pandemic. US surgeon general, Jerome Adams, warned that this week was going to be ‘the hardest and the saddest week of most Americans’ lives.’
Sunday saw the number of US cases of coronavirus rise to 337,000, leaving many ‘Greenback’ traders jittery as America tackles its own domestic outbreak weeks after Europe’s escalation of cases.
Last week’s record-high US unemployment figures has weighed on the ‘Greenback’ today.
A weekly jobless report indicated that over 6.6 million Americans had filed for unemployment bringing the overall total to 10 million. Consequently, the US economic outlook continues to darken as the coronavirus wracks the world’s largest economy.
St. Louis Federal Reserve President James Bullard insists, however, that the US economy is not in ‘free fall’, despite rising fears that the US economy could face a total of 47 million being unemployed due to the nation’s lockdown in response to the coronavirus crisis.
The US Dollar (USD) was beset by negative economic indicators last week, which has dragged into today’s reopening of markets as America faces more uncertainty in the coming weeks.
GBP/USD Forecast: Could the ‘Greenback’ Sink as Covid-19 Cases Increase?
US Dollar (USD) investors will be monitoring America’s coronavirus developments this week, with any signs of an increasing number of cases likely weakening the appeal of the ‘Greenback’.
Meanwhile, any signs of improvement in China would bolster risk sentiment, which would further weaken the safe-haven appeal of the US Dollar and have investors flocking to riskier assets.
The GBP/USD exchange rate will be sensitive to coronavirus developments this week, with Sterling suffering from any complications over Boris Johnson’s health or a rising number of cases as the UK enter its third week of lockdown.