GBP/USD Exchange Rate Edges Higher as Coronavirus Cases Slow in Europe
The Pound to US Dollar (GBP/USD) exchange rate rose by 0.7% today, with the pairing currently trading around $1.23.
The US Dollar (USD) suffered today as riskier assets gained ground after Asian markets rose and S&P Futures stabilized after a robust rally at the beginning of the week.
Additionally, reports of easing coronavirus figures in Italy, Spain, France, and Germany, has also boosted risk sentiment this week.
Meanwhile, US coronavirus-related deaths have risen to 10,000, with nearly 600 deaths being report in New York in just one day.
Consequently, ‘Greenback’ investors are cautious today as the US enters its ‘peak’ period of coronavirus cases. The number of Covid-19 reports in the US is set to increase over the coming weeks.
Analysts have noted the deceleration in infections one of America’s most populated cities as a good sign, however, with stock market sentiment expected to improve as a result.
Dan Clifton, a partner at the advisory firm Strategas Research Partners, was cautiously optimistic, saying:
‘This does not mean that the all clear is immediate, nor does it mean that the U.S. economy will quickly recover. But the light at the end of the tunnel is starting to emerge.’
Pound (GBP) Rises as Gove Reassures that PM Boris Johnson is ‘Not on a Ventilator’
The Pound (GBP) fell last night after it was revealed that Prime Minister Boris Johnson had been rushed to intensive care following complications with his coronavirus infection. Consequently, Sterling traders are becoming increasingly jittery over uncertainties around the PM’s health.
Michael Gove, the Minister for the Cabinet Office, reassured UK markets by insisting that Boris Johnson was ‘not on a ventilator’, saying:
‘The prime minister is not on a ventilator. He has received oxygen support. One of the reasons for being in intensive care is to make sure that whatever support the medical team considered to be appropriate can be provided.’
However, since it’s been reported that there’s been no change in the Prime Minister’s health since his admittance to hospital, the GBP/USD exchange rate could face further volatility.
Today also saw the release of the UK’s Halifax House Prices report, which showed a worse-than-expected jump in March. However, since the coronavirus outbreak buyers and sellers are expected to put a hold on activity.
Russell Galley, Managing Director at Halifax, commented:
‘The UK housing market began March with similar trends to previous months. Key market indicators showed a sustained level of buyer and seller activity.’
‘However, it’s clear we ended the month in very different territory as a result of the country’s response to the coronavirus pandemic.’
GBP/USD Forecast: Sterling Could Rise if Boris Johnson’s Health Improves
US Dollar (USD) investors will be awaiting tomorrow’s The Federal Open Market Committee (FOMC) minutes. Any downbeat assessments about the US economy could weigh on the ‘Greenback’ and increase market risk appetite.
Meanwhile, Sterling traders will be focusing on Boris Johnson’s health as he battles the coronavirus. If we see any positive developments, however, we could see the GBP/USD exchange rate edge higher as Downing Street’s functioning returns to normal.