The Pound US Dollar (GBP/USD) exchange rate has weakened today on the back of the UK’s lockdown easing delay.
The GBP/USD pairing are currently trending around the $1.4049 level as US retail sales fell short of market forecasts.
Pound (GBP) Weakens on UK Economic Recovery Concerns
The Pound has weakened against the US Dollar today following the announcement from UK Prime Minister Boris Johnson that the UK will remain under lockdown restrictions for a further four week period.
Positive employment change figures from the UK were not enough to support Sterling against the US Dollar.
Despite unemployment edging lower to 4.7% during May, the fourth consecutive fall, concerns over the UK’s economic recovery hampered any gains.
Tony Wilson, Institute Director at IES, commented on the latest figures from the Office for National Statistics:
‘Today’s figures confirm that the jobs market is making a strong recovery. Pay-rolled employment added nearly 200 thousand in the month of May alone, its fastest rise on record, while May saw nearly 900 thousand vacancies in the economy, one of its highest figures ever.’
‘However despite this, and continued recruitment problems in a number of industries, there are still more than twice as many unemployed people still chasing every vacancy and long-term unemployment has reached a five year high of over half a million.’
US Dollar (USD) Limited on Disappointing US Retail Sales
The US Dollar has found itself trending higher against the Pound following the broad weakness in the currency following the latest coronavirus developments.
However, limiting the US Dollar today are the latest retail sales figures from the US for May which missed forecasts and fell to -1.3%.
It comes as supply-chain disruptions and the reopening of businesses such as restaurants and bars has triggered a shift of consumer spending from goods to services.
US Dollar traders will also not look to make any movement until the latest interest rate decision from the Federal Reserve tomorrow evening.
Pound US Dollar Exchange Rate Outlook: UK Inflation Data in Focus
Tomorrow will see the release of the most recent inflation rate data from the UK for May. If figures meet forecasts of 1.8% the Pound could find some much needed support.
For US Dollar investors all eyes will be on the latest Federal Reserve (Fed) interest rate decision and press conference.
Whilst the Fed is expected to keep interest rates at 0.25%, a more hawkish tone from the policymakers could see the US Dollar head higher.