GBP/USD Exchange Rate Heads Higher as UK Construction PMI Beats Forecasts
The Pound US Dollar exchange rate rose today following the release of the latest UK Construction PMI. The figure revealed that UK construction activity had risen at its fast rate since 2014.
The pairing is currently fluctuating around $1.37.
Duncan Brock, the group director at the Chartered Institute of Procurement and Supply, commented on the data:
‘Construction was full of the joys of spring in March with a sudden leap into solid growth fuelled by across the board rises in workloads in all sectors. The commercial pipeline was particularly spectacular giving its best performance since late-2014.’
As a result, the Pound US Dollar exchange rate has risen on growing confidence in the UK’s economic recovery, especially now that further lockdown restrictions will be eased on 12th April.
However, following the UK’s medical regulators recommendation of only using the AstraZeneca jab on under-30s, investors are concerned that this could dampen confidence in the Government’s vaccination rollout programme.
Dr Chris Papadopoulos, principal lecturer in public health at the University of Bedfordshire, said:
‘[The] decision is a severe blow to the public’s vaccine confidence, which is already fragile.’
US Dollar (USD) Struggles as US Jobless Claims Mount in April
The US Dollar (USD) fell today following the release of the latest US Initial Jobless Claims for April, which rose to a worse-than-expected 744,000.
Analysts at Reuters commented:
‘The number of Americans filing new claims for unemployment benefits unexpectedly rose last week, but the increase likely understates the rapidly improving labor market conditions as more parts of the economy reopen and fiscal stimulus kicks in.’
Consequently, USD investors are becoming increasingly concerned about America’s rising unemployment crisis.
The ‘Greenback’ has also suffered from weakened demand for safe-haven currencies after the Federal Open Market Committee (FOMC) meeting minutes revealed that the Fed would sustain its monetary policy support for the economy.
US President Joe Biden also delivered a speech in which he announced that infrastructure plans would continue to progress in the interest of national security.
USD investors will be awaiting today’s speech from the US Federal Reserve Chairman Jerome Powell.
Any further bullishness about the US economy could provide a boost for the US Dollar Pound exchange rate.
GBP/USD Exchange Rate Forecast: Could Improving UK Market Confidence Boost Sterling?
US Dollar (USD) traders will be eyeing tomorrow’s release of the latest Producer Price Index figure for March.
Any improvement in the outlook for the US economy could further improve risk sentiment and drag down the USD/GBP exchange rate.
Pound (GBP) investors will remain sensitive to the UK’s Covid-19 situation this week.
The Pound US Dollar (GBP/USD) exchange rate could head higher, however, if UK market mood continues to improve.