GBP/USD Weekly Forecast: Pound US Dollar Exchange Rate Mixed as UK Coronavirus Developments Remain in Focus

The Pound to US Dollar (GBP/USD) exchange rate has been mixed since markets opened this morning. A lack of economic data from both the UK and US has left investors keeping an eye on any coronavirus developments alongside the strength of the global market mood.

Sterling could finds itself supported towards the end of the day if daily coronavirus cases continue to fall.

Last Week: Sterling Steadily Rises as US Dollar Loses Traction

The Pound had started last week struggling for direction as the much-awaited 19 July ‘freedom day’ was largely ignored by concerns that the lockdown easing had come too soon across the UK.

However, towards the end of the week the Pound managed to find some meaningful support in the latest retail sales and flash PMI figures from the UK for June and July respectively.

The US Dollar had been enjoying the first half of last week, however a disappointing initial US jobless claims report paired with an upbeat market mood left the ‘Greenback’ stumbling before the weekend.

Three Things to Watch for This Week

  1. US Durable Goods Orders

Tomorrow will see the release of the latest durable goods orders from the US for June, orders are expected to soften to 2.1%, if the figures beat forecasts however then USD exchange rates could find themselves heading higher.

2. Fed Interest Rate Decision

Towards the end of the week, all eyes will be on the Federal Reserve (Fed) interest rate decision from the US which is expected to drive movement in the ‘Greenback’ before the weekend.

3. US Personal Spending

Friday will also see the release of the most recent flash US personal spending figures for June, personal spending is expected to rise 0.7% adding further support to the US Dollar.

GBP/USD Outlook

This week’s quieter economic calendar for the UK will see movement driven by any further domestic coronavirus developments. A busier week for the US Dollar will see investors keeping an eye on a slew of economic data, including the Fed’s latest interest rate decision.

Georgina Clissold

Contact Georgina Clissold