Pound Sterling US Dollar (GBP/USD) Exchange Rate Rises as US Coronavirus Cases Increase
The Pound Sterling US Dollar (GBP/USD) exchange rate traded up slightly, leaving the pairing trading at around $1.2412.
Earlier this week Sterling slumped against the US Dollar, as traders began to flock back towards safe-haven currencies due to the spread of coronavirus.
Markets grew concerned as the number of coronavirus cases in the United States rose close to almost double that in China. This left the ‘Greenback’ under pressure on Tuesday afternoon.
While the number of cases in the US were on the rise, the World Health Organization (WHO) said the situation in Europe would stabilise soon.
This likely offered markets some support, along with better-than-expected Chinese PMI data.
However, the Dollar received support today as investors continued to flock to the safe-haven, boosting it against other currency pairings. According to Stephen Innes, chief market strategist at financial services firm AxiCorp:
‘The Dollar is still in demand despite pressure easing on risky assets and with liquidity far from average, the main thing to watch today should be month-end quarter-end rebalancing.’
Sterling (GBP) Edges Higher despite Weak Confidence
The Pound edged higher against the Dollar despite data from Lloyds Banking Group Plc showing business confidence slumped this month.
Around two-thirds of firms surveyed said they were already, or very likely to suffer due to the coronavirus pandemic.
The survey is also likely to underestimate the scope of economic fallout due to the virus as it closed a week before Prime Minister Boris Johnson announced stricter lockdown measures.
Meanwhile, further data revealed that consumers were also pessimistic this month.
Households grew less confident in their finances and in the overall British economy.
Commenting on this morning’s data, GfK’s client strategy director, Joe Staton noted:
‘This research was carried out during the first two weeks of March, when the coronavirus was headline news but not impacting day-to-day lives. Lockdown Britain can only expect further deterioration.’
Pound US Dollar Outlook: Manufacturing PMIs in Focus
Looking ahead, the Pound (GBP) could suffer further losses against the US Dollar (USD) following the release of UK manufacturing data.
If Markit reveal that March’s manufacturing PMI slumped further than expected, Sterling will slump.
Meanwhile, the ‘Greenback’ could suffer some losses following the release of ISM’s manufacturing PMI.
If the Fed’s preferred measure of PMI slides further than expected, the Pound US Dollar (GBP/USD) exchange rate will be left largely flat.