GBP/USD Exchange Rate as US GDP Beats Forecasts in First Quarter
The Pound US Dollar exchange rate held steady today following the publication of the latest US GDP figure for the first quarter, which revealed that the US economy had soared by 6.4%. The pairing is currently trading around $1.39.
As a result, the US Dollar (USD) has stabilised now that the outlook for the world’s largest economy has significantly improved.
The US commerce department commented:
‘The increase in first quarter GDP reflected the continued economic recovery, reopening of establishments, and continued government response related to the Covid-19 pandemic.’
Today also saw US jobless claims reach their lowest levels since the beginning of the coronavirus pandemic. 553,000 jobless claims were filed last week, down from last week’s upwardly revised 566,000.
The US Dollar (USD) has also benefited from its safe-haven status as coronavirus cases continue to rise in India, causing concern for the outlook for the global economy.
Pound (GBP) Exchange Rate Steady as UK Economic Outlook Continues to Improve
The Pound (GBP) held steady against the ‘Greenback’ today after the Bank of England (BoE) revealed that it could slow bond purchases now that the UK is showing signs of rebounding from the coronavirus pandemic.
Goldman Sachs has also expressed confidence in the UK economy, saying that it could outgrow the US economy this year.
Jeremy Thomson-Cook, chief economist at international business payments firm Equals Money, commented:
‘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.’
Confidence in the UK economy continues to grow as the nation is set to further ease lockdown measures in May.
In an absence of any influential UK economic data, however, the Pound has been largely rudderless against its peers.
GBP/USD Exchange Rate Forecast: Could Improving Risk Sentiment Begin to Weigh on the ‘Greenback’ This Week?
US Dollar (USD) investors will be looking ahead to tomorrow’s release of April’s Michigan Consumer Sentiment Index.
Any further improvement in the US economic outlook could however being to limit demand for the safe-haven ‘Greenback’.
If risk sentiment also continues to improve, then the US Dollar Pound exchange rate could begin to fall.
The Pound US Dollar (GBP/USD) exchange rate will continue to be driven by UK economic confidence. Any signs of the outlook for the nation’s economy improving would prove GBP-positive.