Pound US Dollar (GBP/USD) Exchange Rate Rangebound amid Soaring Covid-19 Cases
The Pound US Dollar (GBP/USD) exchange rate has remained subdued today ahead of significant US jobs data to be released this afternoon. Soaring Covid-19 cases have also placed pressure on both currencies.
At time of writing the GBP/USD exchange rate is at around $1.3453, virtually unchanged from this morning’s opening figures.
US Dollar (USD) Subdued Ahead of US Jobs Data
The US Dollar (USD) has remained largely muted this morning ahead of the release of US employment data on Friday afternoon.
Non Farm Payrolls and unemployment rate figures, both for December, are currently forecast to show a further tightening of the US labour market as well as potentially confirming record job growth through 2021. Should these figures print as forecast, investors are likely to place significant bets on the currency as the US Federal Reserve signalled earlier this week that a tight labour market could increase the chances on an early interest rate rise.
The release of minutes from the latest policy meeting of the Fed caused shock in the markets on Thursday as they struck a hawkish tone compared to other major central banks. Fed policymakers outlined the need to raise interest rates in order to combat continually soaring global inflation, as well as reducing the Fed’s $8.8 billion balance sheet.
Pound (GBP) Muted as Armed Forces Drafted to Aid NHS
The Pound has trended sideways today as soaring Covid-19 cases and severe NHS staff shortages place pressure on the currency. Rising expectations of an early interest rate hike by the Bank of England (BoE) may have helped limit Sterling’s losses today.
As daily Covid-19 cases in the UK hit over 150,000 new infections every day over the past week, the government has brought in 200 members of the Armed Forces to help support NHS operations in London and the country’s testing regime. Staff absences at hospitals across England rose by 60% compared to the previous week, with sharp rises in the North of England as the Omicron variant continues to spread throughout the country.
Sir David Spiegelhalter, statistician from the University of Cambridge, said that despite this there was cause for optimism regarding the Omicron variant:
‘There’s still no sign of a serious increase in intensive care ventilation and deaths, and we would have expected to see that by now. This is down to the fact that people have voluntarily been very cautious about their behaviour.’