The Pound US Dollar (GBP/USD) exchange rate is trading in a mixed range today as UK markets are becoming more optimistic about the outlook for the economic recovery.
At the time of writing the GBP/USD exchange rate is trending at around $1.3877 as the US Dollar struggles against a risk-on mood.
Pound (GBP) Mixed as Investors Hopeful Over UK’s Economic Recovery
The Pound has been mixed against many of its major rivals today as a lack of any notable data from the UK limits Sterling movement.
However, Sterling is benefitting from an increasingly optimistic outlook for the UK’s economic recovery from the coronavirus pandemic as the successful vaccine rollout and lockdown easing so far goes to plan.
Chief economist at international business payments firm Equals Money, Jeremy Thomson-Cook, commented that the Pound could see itself heading even higher in the coming weeks:
‘The dichotomy of rising Covid-19 cases globally but a UK that is enjoying reopened bars, restaurants and shops should continue to work in the pound’s favour should the vaccination program continue to progress, the hospitalisation rate remain low and border controls stay in place to eliminate the risk of further outbreaks.’
In the absence of any notable UK economic data today, the Pound has seen itself limited in its movement however.
US Dollar (USD) Mixed on Risk-On Mood
The US Dollar has found itself struggling with a risk-on mood today and pullback is US treasury yields, as investors abandon the safe-haven USD in favour for risk-and-trade correlated currencies like the ‘Aussie’ the currency suffers.
Investors remain cautious over the Federal Reserve’s latest interest rate decision on Wednesday, as a continuing dovish outlook from the Fed could pull down the ‘Greenback’ further.
Today saw the release of the latest durable goods orders from the US for March, which rose by 0.5%, missing forecasts of 2.5%.
According to the United States Census Bureau the data showed that:
‘New orders for manufactured durable goods in March increased $1.4 billion or 0.5 percent to $256.3 billion, the U.S. Census Bureau announced today. This increase, up ten of the last eleven months, followed a 0.9 percent February decrease.’
Pound US Dollar Exchange Rate Outlook: Richmond Fed Manufacturing Index in Focus
US Dollar (USD) investors will be looking ahead to tomorrow’s release of the Richmond Fed manufacturing index for April.
If the index meets forecasts of 19, a four month high, it could cause the US Dollar to head higher.
The global market mood will continue to drive movement in the US Dollar this week, if risk sentiment continues to rise then USD could fall.
The Pound will be driven by any coronavirus developments in the coming days, with investors keeping an eye on the Indian mutation of the virus.