Pound US Dollar Volatile as Markets Await FOMC Minutes

The Pound US Dollar (GBP/USD) exchange rate has been trading in a volatile range since markets opened this morning as investors await the latest Federal Open Market Committee (FOMC) minutes later on this evening.

At the time of writing the GBP/USD pairing are trending around the $1.3802 level as a lack of notable data from the UK leaves Sterling open to losses.

Pound (GBP) Limited in Absence of Notable Economic Data

The Pound has found itself clinging to any gains this morning as a lack of notable data from the UK along with caution surrounding the UK’s economic reopening from coronavirus limits the appeal of Sterling.

Whilst the final easing of coronavirus restrictions is expected to go ahead on the 19th July, experts and doctors continue to warn of the implications opening too early may have.

Sir Paul Nurse, who heads the Francis Crick Institute, spoke to UK radio earlier this morning:

‘I think it’s not unreasonable for the government to open the country up more, given the success of the vaccine rollout. But I’m really not sure it’s sensible to open up so much so fast when the level of infection is rising so quickly.

‘It makes no sense not to insist on the wearing of masks. We need sensible, well thought out, good plans.’

Sterling could be open to further losses throughout the day in absence of any economic data from the UK.

US Dollar (USD) Mixed as Markets Await Influential US Data

The US Dollar has been mixed since markets opened this morning as investors await key economic data from the US later in the day.

The US JOLTs job openings for May could give an indication into the performance of the US jobs market recovery.

Though for most traders all eyes will be on the FOMC minutes later on this evening.

Whilst the Federal Reserve were hawkish in their recent policy decision surrounding the US economic recovery, if the FOMC minutes relay concerns over employment figures and dismiss inflationary pressures then the ‘Greenback’ could stumble.

Pound US Dollar Exchange Rate Outlook: US Jobless Claims in Focus

For US Dollar investors, tomorrows initial US jobless claims could provide fresh impetus for USD if claims continue to fall to new lows.

A lack of notable data from the UK will instead see Pound traders keep an eye on any further coronavirus developments to drive movement in the currency.

The GBP/USD exchange rate will continue to be driven by the global market mood in the coming days, as cases of the delta variant of coronavirus continue to surge across Asia USD could head higher against many of its major rivals.

Georgina Clissold

Contact Georgina Clissold