GBP/USD Exchange Rate Risk-Off Markets Drive Demand for ‘Greenback’
The Pound US Dollar (GBP/USD) exchange rate fell by -0.4% today as the safe-haven ‘Greenback’ has benefited from rising concerns about global Covid-19 infections. The pairing is currently fluctuating around $1.37.
Europe’s rising Covid-19 cases have contributed to the increased demand for the US Dollar today, as concerns grow over the EU’s third-wave of the virus.
US-China tensions have also driven up demand for the risk-correlated ‘Greenback’ today.
Meanwhile, Covid-19 cases in the US are showing concerning signs of rising, sparking concern for the world’s largest economy.
Dr Rochelle Walensky, the Director of the US public health agency, the Centres for Disease Control and Prevention (CDC), commented:
‘I’m going to reflect on the reoccurring feeling I have of impending doom. [W]e have so much reason for hope, but right now I’m scared.’
Pound (GBP) Struggles as PM Urges Public to ‘Proceed with Caution’
The Pound (GBP) struggled against the US Dollar (USD) today after Prime Minister Boris Johnson warned the public to ‘proceed with caution’ as Covid-19 infections continue to rise throughout the EU.
Mr Johnson said:
‘What we don’t know is exactly how strong our fortifications now are, how robust our defences are against another wave.’
Yesterday saw the UK take its first big step in easing lockdown restrictions, with groups of no more than six allowed to meet outdoors.
However, the ONS announced that the UK’s Covid-19 death toll had exceeded 150,000 today, dampening confidence in the UK’s handling of the situation.
Nevertheless, Boris Johnson has expressed confidence in the easing of the lockdown measures in the months ahead, saying:
‘I’m hopeful; I don’t see anything in the data right now that would cause us to deviate from the roadmap.’
GPB/USD Exchange Rate Forecast: Could an Improving Outlook for the UK Economy Boost Sterling This Week?
Pound (GBP) investors will be monitoring tomorrow’s release of the UK’s GDP figure for the final quarter of 2020.
Any improvement in the outlook for the UK’s economy this year, however, would prove GBP-positive.
In US economic data, tomorrow will see the release of the latest US ADP Employment Change figure for March.
Any rise in unemployment in the US could weaken the ‘Greenback’.
The Pound US Dollar (GBP/USD) exchange rate could claw back some of its losses this week if the UK’s falling number of Covid-19 infections boost confidence in the nation’s economic recovery in the months ahead.