Pound US Dollar Exchange Rate Rangebound in Absence of Data

Pound US Dollar Exchange Rate Still Subdued despite Rise in US Jobless Claims

(Updated 15:45, 8/7/21) The Pound US Dollar (GBP/USD) exchange rate continues to trade just shy of the $1.378 mark, despite the latest initial jobless claims data from the US missing market forecasts.

New unemployment benefits claims in the US were expected to fall from 371,000 to 350,000 in the most recent report, but instead rose to 373,000.

Initially the Pound rebounded against the US Dollar following the figures, but without anything driving demand in Sterling it was unable to hold on to its gains.

Original article continues below:

Pound US Dollar Exchange Rate Steadies after Falling Overnight

The Pound US Dollar (GBP/USD) exchange rate has traded in a narrow range this morning, with no notable data driving movement on either side.

Yesterday saw the US Dollar climb on a bearish market mood, but the upside seems to have peaked early this morning, with GBP/USD currently trading at around the $1.378 mark.

US Dollar (USD) Gains on Risk-Off Sentiment

The US Dollar (USD) started strong against the Pound (GBP) this morning, buoyed by an increasingly cautious market mood.

This risk-averse sentiment saw the ‘Greenback’ make gains yesterday and through overnight trade. With coronavirus cases rising again globally, investors flocked to the safe-haven currency.

The upside came despite both the US JOLTS job openings and IBD/TIPP economic optimism index failing to meet market forecasts.

In addition, the June meeting minutes from the FOMC struck a broadly dovish tone. Many participants emphasised the need for caution and patience amid the ongoing uncertainty of the pandemic’s economic impacts, while some expressed more hawkish views.

However, the minutes did not clarify when the Federal Reserve might begin tapering bond purchases or raising interest rates.

As European markets digest the minutes this may prevent USD from making any further gains this morning.

Pound (GBP) Flat on Lack of Data

The Pound US Dollar exchange rate see-sawed in a narrow range this morning, with GBP edging downwards overall.

Sterling is currently suspended between optimism over the further unlocking of the UK economy and fears of rising coronavirus cases. With most of the remaining restrictions set to be lifted on 19 July, the UK’s economic recovery could receive a big boost, particularly in events, hospitality and tourism.

However, some in the scientific community are concerned that a huge spike in cases could follow, leading to increased hospitalisation and new, more dangerous variants.

Pound US Dollar Exchange Rate Forecast: Could the Pairing Dip on US Jobs Data?

With no market-moving data coming out of the UK today, it’s possible that GBP/USD could trade in a relatively narrow range for the first part of the day.

This afternoon could see the Pound US Dollar exchange rate dip slightly, as America’s initial jobless claims figures are forecast to show another drop in unemployment. This sign that the US economy continues to recover could lift the ‘Greenback’.

UK Brexit and coronavirus news could also impact the pair, with any negative headlines weighing on Sterling.

Samuel Birnie

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