The Pound to US Dollar (GBP/USD) exchange rate has been limited since markets opened this morning.
A lack of economic data from the UK has left investors to keep eye on any domestic coronavirus developments whilst the US Dollar continues to capitalise on the stronger-than-expected non-farm payroll figures at the end of last week.
What’s Been Happening: Sterling Stumbles as US Dollar Soars
The Pound had started last week struggling to make any headwind as the latest lacklustre PMI figures from the UK did nothing to support Sterling gains.
However, towards the end of the week the Pound managed to find some meaningful support on the back of the latest interest rate decision and commentary from the Bank of England (BoE).
Though those gains soon dispersed as a better-than expected non-farm payrolls report from the US caused the ‘Greenback’ to soar, and the Pound to stumble heading into the weekend.
Three Things to Watch for This Week
- US Inflation Rate
Mid-week will see the release of the latest inflation rate figures from the US for July. If inflation continues to rise then the US Dollar could push higher as markets become jittery over whether the Federal Reserve could choose to hike interest rates sooner than expected.
2. UK GDP Figures
Towards the end of the week, all eyes will be on the preliminary GDP figures from the UK for Q2. If the UK’s GDP rate re-enters growth territory then the Pound could find some much needed support against the majors.
3. US Jobless Claims
Thursday will also see the release of the most recent flash US initial jobless claims for the week ending 6 August. If jobless claims continue to fall the US Dollar could find fresh impetus to strengthen further.
GBP/USD Forecast
This week’s quieter economic calendar for the UK will see movement driven mainly by any further domestic coronavirus developments throughout the week. A slightly busier week for the US Dollar will see investors keeping an eye on a slew of economic data, with the other eye firmly on the global market mood.