GBP/USD Exchange Rate Steady as UK Growth is Revised Up from a Record Slump
The Pound US Dollar exchange rate held steady today after UK GDP was revised up from 1% to 1.3% in the final quarter of 2020. The pairing is currently trading around $1.37.
However, the Pound (GBP) failed to make any notable gains following the data, with the figure being revised upward only slightly from a record slump.
Jonathan Athow, the Office for National Statistics (ONS) deputy national statistician for economic statistics, commented on the data:
‘Our revised quarterly figures show the economy shrank a little more than previously estimated in the initial stages of the pandemic, before recovering slightly more strongly in the second half of last year.’
Today also saw news that at least half of people in the UK now have antibodies – either from the vaccine or from having caught the virus previously – against Covid-19, according to the ONS.
As a result, Pound traders are more hopeful that increased levels of resistance against the virus could further help lower cases of the virus in the UK going forward.
US Dollar (USD) Steady as US Treasury Yields Rise
The US Dollar (USD) held steady against Sterling today as the ‘Greenback’ remains bolstered by rising US Treasury yields.
Analysts at the Financial Times commented:
‘A key measure of US long-term borrowing costs hit its highest level since the early days of the coronavirus crisis on Tuesday in the penultimate trading session of a brutal quarter for global government bonds.
‘The 10-year Treasury yield rose as much as 0.06 percentage points from Monday’s closing level to touch 1.77 per cent, the highest point since January 2020, according to Bloomberg data, before rebounding to trade at 1.72 per cent.’
Coming up this afternoon, today will see the release of the latest US ADP Employment Change figure for March, which is expected to rise to 550,000.
US markets are becoming more confident about the outlook for America’s economy, however, as details emerge over President Joe Biden’s largescale infrastructure stimulus plans.
As a result, we could see the ‘Greenback’ shed some of its gains as global risk sentiment improves on an increasingly bullish outlook for the world’s largest economy.
GBP/USD Exchange Rate Forecast: Could an Improving UK Manufacturing Sector Boost the Pound?
Pound investors will be awaiting tomorrow’s publication of the latest UK Markit Manufacturing PMI for March.
Any improvement in the UK’s Manufacturing sector would prove GBP-positive.
US Dollar (USD) traders will be looking ahead to tomorrow’s release of the US ISM Manufacturing PMI for March, which is forecast to rise to 61.3.
As the outlook for the US economy continues to improve, however, we could see risk-sentiment improve and drag down demand for the safe-haven ‘Greenback’.
The Pound US Dollar exchange rate could head higher this week if the outlook for the UK economy continues to improve as the nation’s Covid-19 cases continue to fall.