The Pound US Dollar exchange rate remained just above the $1.37 level today as the pairing remains strong on President Joe Biden’s first full day in office.
The pairing is currently trading around $1.1371.
Pound (GBP) Bolstered Though UK Schools Now Expected Back by Easter
The Pound kept its gains today as global appetite was raised with Joe Biden sworn in as 46th President of the United States.
The new President is expected to announce a $1.9TRN stimulus package to help boost the American economy following on from the continuing coronavirus pandemic.
Markets are confident that the stimulus package will boost the global economic situation, and in turn push the Pound higher.
Furthermore, Pound investors remain hopeful as the UK’s coronavirus vaccine rollout almost hits experts’ projections of 350,000 doses a day.
Yesterday over 343,000 doses were administered to the most vulnerable of the UK’s population, with investors optimistic that lockdown restrictions will be eased in mid-February as the government had first announced.
However, today saw Gavin Williamson, the Secretary of State for Education, announce that he hoped schools would be able to reopen before Easter, a far cry from February.
Consequently, speaking earlier today Prime Minister Boris Johnson spoke on the lockdown, saying:
‘I think it’s too early to say when we’ll be able to lift some of some of the restrictions. We’re seeing the contagiousness of the new variant that we saw arrive just before Christmas. There’s no doubt it does spread very fast indeed.’
An extended lockdown could put further pressure on the economy and push Sterling down.
US Dollar (USD) Down as Stimulus Package Announcement Looms
The US Dollar was down today as the new administration enjoys its first day in office.
With President Joe Biden expected to announce a $1.9TRN stimulus package to aid the damage of the coronavirus pandemic, risk-correlated currencies cheered as risk appetite increased and demand for the safe-haven was down.
It’s expected that, if passed, rising federal government spending will lead to a wider U.S. budget deficit and higher inflation.
The US Dollar was slightly supported today as the number of Americans filing for unemployment declined to 900 thousand in the week ended January 16th, beating forecasts yet still well above pre coronavirus pandemic levels.
Pound to US Dollar Outlook: UK PMI’s Could Push Sterling Down
Pound investors will look to tomorrow’s PMI Services data release, which is expected to show a further contraction in growth which could cause investors to worry about UK growth for the start of 2021, and cause Sterling to fall.
Coronavirus developments will also remain in focus for Pound traders, with any indication that lockdown restrictions will be extended proving negative for GBP.
US Dollar traders will be keeping an eye on any further developments in the Biden administration’s stimulus package, which could cheer global markets but cause further trouble for the currency.
USD investors could also be shown some insight into the US economy for the start of 2021 as US Markit PMI’s are released.