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Pound US Dollar Exchange Rate Mixed as Markets Await US Non-Farm Payrolls

Pound US Dollar Currency Forecast

The Pound US Dollar (GBP/USD) exchange rate has been mixed for much of the day as markets await the latest non-farm payrolls data from the US later this afternoon.

The GBP/USD pairing have been trading around $1.3918 as Sterling continues to find support from the UK’s economic optimism surrounding the recovery from the coronavirus pandemic.

Pound (GBP) Supported by UK Economic Optimism

The Pound has been supported against the US Dollar for much of the day as UK economic optimism helps to bolster the currency heading into the weekend.

Later on today, it is though that the UK government will announce the ‘green-light’ list of countries that holiday-makers can visit without needing to quarantine for coronavirus when they return to the UK.

Andrew Flintham, TUI’s managing director commented this morning that the focus should be getting people on holiday, and not on raising prices in the travel industry:

‘We’ve got plenty of holidays to sell. I think everybody in the industry has. It’ll be a long time before the idea of trying to increase prices to make more money. We want to get people away on holiday, having a great time, because we think they genuinely all deserve it.’

The UK’s third stage of lockdown easing is expected to be enforced in just over a week’s time, and investors remain increasingly optimistic over the UK’s rapid recovery from coronavirus.

US Dollar (USD) Awaits Latest US Non-Farm Payrolls

The US Dollar has been muted against many of its major rivals today as investors wait for the latest US non-farm payrolls data for April.

USD had been supported yesterday following a better-than-expected US jobless claims which saw the figure fall below 500,000 for the first time since the pandemic began.

It is thought that the US economy will have brought back and created almost 1 million jobs in April, the largest increase since August last year, and the unemployment rate falling to a new pandemic low.

Analysts at ING spoke to clients regarding payrolls and inflation hikes:

‘Regarding today’s U.S. payrolls number, the Fed’s (Chairman Jerome) Powell has largely taken the excitement out of today’s anticipated strong reading as he will want to see a series of good readings before contemplating any changes.’

Pound US Dollar Exchange Rate Outlook: UK GDP Data in Focus

Heading into next week, Pound investors will be keeping an eye on the latest preliminary GDP data from the UK for Q1.

GDP is expected to have fallen -1.4% in Q1 due to the stricter third national lockdown imposed to combat coronavirus, however the latest hawkish tone from the Bank of England (BoE) could overrule the latest data.

US Dollar investors will be focusing on the latest inflation data from the US which is forecast to have jumped to 3.6%, which could give some much needed support to the ‘Greenback.