Pound US Dollar Exchange Rate Flat as Russia Continues to Attack Ukraine
The Pound US Dollar (GBP/USD) exchange rate is directionless this morning as investors remain cautious amidst ongoing geopolitical uncertainty.
At the time of writing, the GBP/USD exchange rate is trading at approximately $1.3376, with minimal market movement from today’s opening levels.
US Dollar (USD) Directionless as Russia-Ukraine War Remains in Spotlight
The US Dollar (USD) is trading in a narrow range against the Pound (GBP) after a market correction saw the ‘Greenback’ retreat from yesterday’s highs.
Russia’s attack on Ukraine remains the key catalyst for movement between the pairing however, as Ukraine announces the death of 137 citizens and another 316 wounded.
In response, US President Joe Biden announced another tranche of sanctions on Russia yesterday evening proclaiming that ‘Putin is the aggressor. Putin chose this war. And now he and his country will bear the consequences.’
Moreover, Federal Reserve policymaker, Christopher Waller, delivered a hawkish speech overnight which has bolstered interest rate hike bets and bolstered the ‘Greenback’.
Waller said:
‘I believe appropriate interest rate policy brings the target range up to 1 to 1.25 percent early in the summer.
‘Of course, it is possible that the state of the world will be different in the wake of the Ukraine attack, and that may mean that a more modest tightening is appropriate.
‘[However, the Fed] must respond decisively to the data so as to maintain our credibility that we will bring down inflation.’
Pound (GBP) Mixed Amid Geopolitical Uncertainty
The Pound (GBP) is rangebound against the US Dollar (USD) at the beginning of today’s session as investors remain cautious due to the uncertainty over the situation in Ukraine.
On the other hand, Bank of England’s (BoE) policymaker, Huw Pill, delivered an upbeat speech yesterday evening which is capping the Pound’s losses.
Pill said:
‘Inflation is uncomfortably high. I think unfortunately in the coming few months, inflation may be set to go a little higher because some of the impact of energy price increases that we’ve seen are still to feed through to utility prices.’
Pill continued that BoE is looking to reduce inflation in a ‘measured way’ and in a manner that ‘doesn’t disturb the rest of the economy, growth and employment in a way that’s unnecessarily costly.’
Pound US Dollar Exchange Rate Forecast: Will US Durable Goods Orders Bolster USD?
Later today, US durable goods orders may cause pressure on the Pound US Dollar exchange rate.
January’s figures are forecast to report a 0.8% rebound in goods order growth last month.
On the other hand, the PCE price index for January may report another rise in inflation last month which may bolster the US Dollar.
Meanwhile, an absence of UK data today will leave the Pound susceptible to market movement as geopolitical developments evolve.