GBP/USD Exchange Rate to fluctuate in Lead Up to Symposium?
The Pound (GBP) is trading level against the US Dollar (USD) this morning as both currencies face headwinds. USD investors are waiting with baited breath upon the outcome of the Jackson Hole Symposium, which may be used as an opportunity to review US monetary policy.
At the time of writing, GBP/USD is trading at $1.3723, virtually unchanged from today’s opening levels.
US Dollar (USD) Falters, Finds Support on Positive Data Releases
The US Dollar faces headwinds as investors await developments via the Jackson Hole Symposium. The ‘Greenback’ has managed to stave off significant losses, however, as data revealed yesterday that new home sales in the US jumped by 1%.
Having printed above expectations, the data continues to support the Dollar through today’s session. The USD is also supported by a slowdown in the spread of Covid-19 infections in America, alongside a pickup in vaccination rates.
Looking to the remainder of today’s session, US durable goods orders may provide trading stimulus. Headline orders are set to drop while core ones are projected to edge higher.
Further direction will be fuelled by speculation over the outcome of the symposium. The event will be held online this year due to coronavirus distancing measures, with Federal Reserve Chairman Jerome Powell due to speak on Friday.
Pound (GBP) Clinging Onto Gains on Risk-On Market Mood
The Pound is under pressure as a lack of significant data has left the currency open to losses. While supply chain concerns and fresh coronavirus worries arise, bearish USD trading lends support.
Yesterday’s CBI data revealed that retailers’ stock levels are at their lowest since at least the 1980s, due to global supply chain disruption triggered by the pandemic and worker shortages.
Meanwhile, Covid-19 is claiming one hundred lives a day across the UK, on average. Health experts are calling for an ‘urgent’ need for booster injections, as the Zoe COVID Study finds that Covid protection from two vaccine doses begins to wane within six months.
Forecasts predict that supply chain disruption is likely to continue: if haulage vacancies can’t be filled soon by UK workers, Christmas supplies in food and retail are also likely to be threatened.
Without any significant UK data on the horizon for the remainder of the week, UK trading sentiment is likely to be driven by further coronavirus developments. Tempering the downside effects of rising market concerns, a risk-on trading mood will support the Pound US Dollar exchange rate.