Following the Bank of England’s (BoE) interest rate decision yesterday afternoon the Pound has struggled to find any support heading into the weekend.
The Pound US Dollar (GBP/USD) is currently trending around the $1.3904 level as the US Dollar also finds itself struggling today.
Pound (GBP) Limits Sterling Appeal
The BoE’s interest rate decision and subsequent commentary regarding the UK’s economic recovery yesterday afternoon has continued to cause the Pound to stumble today.
A lack of new commentary regarding potential interest rate hikes sooner-than-expected, and no pullback from the banks quantitative easing (QE) programme continues to limit the Pound.
More so, yesterday evenings announcement from the UK government that more countries had been added to the UK’s travel green list along with hints that those who are fully vaccinated would not need to quarantine after visiting amber list countries could not push the Pound higher today.
Danny Callaghan, CEO of the Latin American Travel Association and the chairman of the Travel Industry Alliance commented on the government’s latest decision:
‘While the addition of a few countries to the green list is a welcome development, there is still a huge amount of mistrust amongst the public following the Portugal debacle, so we must keep up pressure on the government to stick to the protocols of the Global Travel Taskforce so that they don’t suddenly put one of these green-listed countries back to amber.’
The Pound looks set to be open to further losses throughout the day as an absence of economic data limits GBP exchange rates.
US Dollar (USD) Weakens amid Disappointing Economic Data
The US Dollar has been struggling for much of the day as a range of economic data from the US missed forecasts and disappointed investors.
This afternoons personal spending figures from the US for May remained unchanged, offset by a decline in spending for services, missing forecasts of 0.4%.
An upbeat market mood paired with stagnant US treasury yields have also limited the US Dollar’s appeal heading into the weekend.
Pound US Dollar Exchange Rate Outlook: UK GDP Growth in Focus
Heading into next week, Pound investors will be looking towards the final UK GDP growth rate reading for Q1 which is forecast to show the UK economy fell back in contraction which could limit Sterling further.
Later in the week, US Dollar traders will be focusing on the latest ISM manufacturing PMI from the US which could influence the ‘Greenback’s’ movement.
The GBP/USD pairing will continue to be driven by any further coronavirus developments in the coming days.