The Pound to US Dollar (GBP/USD) exchange rate has edged lower since markets opened this morning on the back of supply-chain issues continuing to cause problems across the UK.
The GBP/USD exchange rate is currently trending around the $1.3842 level as the US Dollar remains appealing as the global market mood sours.
What’s Been Happening: Disappointing Non-Farm Payrolls Limit US Dollar
The Pound (GBP) had been able to push higher against the US Dollar (USD) for much of last week despite lacklustre PMI figures from the UK.
The US Dollar had found itself struggling throughout the week as a more upbeat market mood surrounding the global recovery from the coronavirus pandemic paired with worse-than-expected US ADP employment change reading did nothing to support the ‘Greenback’.
The GBP/USD pairing ended the week trending higher as risk-on trade prevailed and the damage of the latest US non-farm payrolls figures allowed the Pound to strengthen in lieu of any positive economic data.
Three Things to Watch for This Week
- US JOLTs Job Openings
Wednesday will see the release of the latest JOLTs job openings data from US. The amount of job openings in the US is expected to remain high as the country’s labour recovery from the coronavirus pandemic continues.
2. UK GDP Figures
Friday will see the release of year-on-year GDP figures from the UK for July. GDP is forecast to have expanded 8% on the year as the UK’s economic recovery remains well underway.
3. US Producer Prices
US Dollar investors will also look towards Friday’s producer price index for August which is thought to have increased a further 0.6% as the costs of goods rises, which could continue to spark concerns over inflationary pressures.
GBP/USD Exchange Rate Forecast
For much of this week, movement in the GBP/USD pairing looks too be driven by the global market mood and any domestic coronavirus developments. Though the end of the week could see a slew of economic data from the UK drive Sterling higher heading into the weekend.