(Updated 15:20, 6/7/21) The Pound to US Dollar (GBP/USD) exchange rate is trading at around $1.3831 level this afternoon following the latest US ISM non-manufacturing PMI.
Although the PMI softened to 60.1 points from 64 the month previous the figures have shown a sustained growth in the US economy.
Anthony Nieves, Chair of the Institute for Supply Management (ISM) commented on the latest PMI saying:
‘The rate of expansion in the services sector remains strong, despite the slight pullback in the rate of growth from the previous month’s all-time high. Challenges with materials shortages, inflation, logistics and employment resources continue to be an impediment to business conditions.’
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The Pound US Dollar (GBP/USD) exchange rate has weakened today despite a better-than-expected construction PMI from the UK as investors remain cautious over the UK’s lockdown easing plans on the 19th July.
At the time of writing the GBP/USD pairing are trending around the $1.3846 level as markets await the latest ISM non-manufacturing PMI from the US later this afternoon.
Pound (GBP) Weakens over Coronavirus Concerns
The Pound has weakened against many of its major rivals today as concerns over the UK’s proposed lockdown easing concerns markets.
Yesterday evening Prime Minister Boris Johnson announced the scrapping of social distancing measures and mandatory face masks if the lockdown easing goes ahead on the 19th July, a decision that will be made at the start of next week.
Speaking to UK television earlier this morning, Health Secretary Sajid Javid said:
‘We can’t live in a world where the only thing that we are thinking about is Covid – and not about all the other health problems, our economic problems, our education challenges and we have to make use of a vaccine that is thankfully working.’
‘When I came into this department with a fresh set of eyes – it is shocking when you look at all the other health problems that have built up: Some 7 million people have not come forward during the pandemic for help from the NHS with their health problems.’
Professor Sir Mark Walport, the government’s former chief scientific adviser was less than optimistic surrounding the proposed easing, saying:
‘As the prime minister says, by 19 July it’s quite likely there’ll be 50,000 cases a day and when we do take off the restrictions it will make the conditions for transmission of the virus even more favourable for the virus.’
‘I think there is a very high priority to keep the vaccines up, and I think the other thing is the guidance needs to be very clear for people.’
US Dollar (USD) Strengthens as Markets Await US ISM PMI Data
The US Dollar has strengthened today as markets await the latest US ISM non-manufacturing PMI later this afternoon.
If the PMI continues to show a sustained growth in the US economy the ‘Greenback’ could head higher against many of its counterparts.
The US Dollar had been limited on the back of a more upbeat market mood this morning, though the currency has found a slight resurgence ahead of the economic data release later on.
Pound US Dollar Exchange Rate Outlook: FOMC Minutes in Focus
For Pound investors, a lack of notable data will see movement driven by any further coronavirus developments in the coming days.
US Dollar traders will look towards tomorrow evening’s FOMC minutes which if take the same hawkish tone as the recent Federal Reserve (Fed) will see the ‘Greenback’ further supported towards the end of the week.
The GBP/USD pairing will continue to be driven by the global market mood, a more upbeat mood could see the US Dollar begin to struggle.