Pound to US Dollar Exchange Rate Sustains Weekly Gains despite Mixed Appeal
Despite a lack of fresh support for the Pound (GBP) this week, the Pound Sterling to US Dollar (GBP/USD) exchange rate has sustained gains. As market sentiment improves, investors are selling safe haven currencies like the US Dollar (USD).
GBP/USD movement has been lighter this week overall as markets continue to calm. Following last week’s tumble of almost two cents, this week’s gains have been a little thinner.
GBP/USD has seen solid gains overall though, gaining from the week’s opening levels of 1.2269 to trend near the level of 1.2401 at the time of writing.
Investors are hesitant to make huge moves on either currency this morning as domestic coronavirus developments are awaited.
Pound (GBP) Exchange Rates Benefit from Risk-Sentiment but Boris Johnson Remains Hospitalised
Investors have had little reason to buy the Pound this week. Despite this and the uncertainty in the UK outlook though, the British currency continues to climb.
The Pound has been seen as a relatively risky currency amid thed coronavirus pandemic. It has typically been dented by a worsening outlook while being supported by hopes that the coronavirus situation is improving.
As markets continue to calm on hopes that the coronavirus pandemic could soon peak, the Pound has seen support.
This morning’s UK growth data was mixed, but was largely from February and had no notable impact on Sterling. As UK Prime Minister Boris Johnson remains hospitalised over coronavirus symptoms, the Pound’s potential for gains has been limited.
US Dollar (USD) Exchange Rates Pressured Ahead of US Jobless Claims Report
The US Dollar has seen another week of weaker performance this week. As the market’s safe haven currency of choice, this also means that it is losing a lot of ground as markets calm.
Safe haven appeal is being softened by a combination of global fiscal stimulus efforts, as well as hopes that the spread of the coronavirus is slowing. This has been the primary cause of USD losses this week.
The US Dollar hasn’t seen much domestic support either. Concerns that the US economic outlook is worsening more than expected amid the coronavirus pandemic are also keeping pressure on USD.
Federal Reserve meeting minutes published last night noted that there was huge uncertainty in the US outlook.
For now, US Dollar investors are awaiting today’s US jobless claims stats after shockingly poor US job data in recent weeks.
Pound to US Dollar (GBP/USD) Exchange Rate Awaits US Jobless Report and Shifts in Risk
In terms of data, US Dollar investors are eagerly awaiting this afternoon’s US jobless claims report. US job stats have been shockingly bad in recent weeks.
This data is expected to give investors a better idea of if the coronavirus pandemic continues to have a worsening impact on US economic activity.
GBP/USD has been driven more by market risk-sentiment this week though. As investors are more willing to take risks again, safe havens like the US Dollar have been a lot less appealing.
As a result, any signs that the coronavirus pandemic is peaking or slowing could bolster market sentiment. This would make safe havens even weaker.
While GBP/USD movement is likely to be driven mostly by market sentiment in the coming sessions, the Pound could also be driven by the domestic coronavirus outlook.
If UK Prime Minister Boris Johnson shows more signs of a smooth recovery, the Pound to US Dollar (GBP/USD) exchange rate could see more sturdy support and the outlook could rise.