Pound US Dollar (GBP/USD) Exchange Rate Wavers as JOLTs Published, Fed Speeches to Come
The Pound US Dollar (GBP/USD) exchange rate has seen movement in a wide range today as trader sentiment fluctuated in the run up to this afternoon’s US job openings data. Two Federal Reserve policymakers will give speeches this afternoon, with the potential to boost the US Dollar (USD).
At the time of writing, the Pound (GBP) is trading at $1.3885, consolidating this morning’s marginal gains.
US Dollar (USD) to Strengthen on Data-Heavy Week?
The US Dollar faces an abundance of stimuli this week, beginning this afternoon with June’s JOLTs job openings figures.
New job openings have printed at 10.073 million – an increase on last month’s 9.209 million, and exceeding estimates by 792,000. Job openings increased in several industries, with the largest gains in professional and business services, retail trade and accommodation and food services.
The JOLTs figures highlight that firms are struggling to attract workers as the economy reopens from the pandemic: although firms did manage to recruit more workers, with 6.7 million hires in June, up 697,000 from May. So far, the figures haven’t triggered any major movement in the GBP/USD exchange rate.
Following on from JOLTs job openings, two speeches are scheduled, by Federal Reserve policymakers Raphael Bostic and Thomas Barkin.
The bank’s state presidents are expected to provide clarity on the central bank’s forward guidance, perhaps hinting at whether the Fed will begin tapering soon. Following last week’s strong non-farm payrolls and unemployment data, investors have already begun to factor in imminent monetary policy tightening measures.
A speech by policymaker Charles Evans tomorrow is followed by inflation data on Wednesday and jobless claims on Thursday. The former is expected to print at 5.3% – down just 0.1% from last month – while jobless claims look to fall by 10 thousand. If the data prints as expected, the Pound US Dollar exchange rate is likely to tumble.
Additional speeches by Raphael Bostic and Esther George will likely provide further clues as to the Fed’s current economic outlook.
Pound (GBP) Open to Losses on Lack of UK Data
The Pound traded high last week on optimistic forward guidance from the Bank of England (BoE) and above-expected PMI figures. The UK also continued to see falling numbers of coronavirus infections.
This week, however, Sterling faces headwinds as UK data is sparse until Thursday. Domestic Covid cases have also ticked up again, albeit only slightly, from 26,200 last Thursday to 26,866 on Saturday.
Despite this, pressure upon the Pound doesn’t appear to be having too much of a negative effect. This may be on account of the country’s optimistic stance regarding the end of the pandemic.
Professor Balloux, director of the Genetics Institute at University College, London declared to the BBC that he thinks the pandemic is ‘nearly’ over; he predicts ‘a few flares and outbreaks’, but is ‘pretty confident’ that in countries with high rates of vaccination, the pandemic phase of the virus will be over by spring.
Looking forwards, a glut of data will be published on Thursday, including GDP and industrial production figures. Regarding the former, GDP is estimated to have grown by 4.8% in the second quarter – which, if confirmed, could significantly elevate the Pound US Dollar exchange rate.
Industrial production, meanwhile, is expected to rise by 0.3%- a small increase, but one which would reflect an uptick in manufacturing activity and industrial output as society has slowly begun to reopen.