GBP/USD Exchange Rate Rises, US Dollar Struggles as Europe’s Covid-19 Cases Drop
The Pound to US Dollar (GBP/USD) exchange rate rose today, with the pairing currently trading around $ 1.233.
The US Dollar (USD) struggled against the Pound (GBP) today as safe-haven demand continues to ebb with Europe showing encouraging signs of easing coronavirus infections.
For example, Italy, one of the most affected nations in Europe, showed a drop off in inflections to its smallest in nearly four weeks.
Giovanni Rezza, the Director of the Infectious Diseases Division at the National Health Institute, commented:
‘Finally, it seems we are beginning to see a lessening of new cases’ after a plateau phase.’
Last night also saw US President Donald Trump announced that the nation’s economy would open sooner rather than later. Smaller cities, not heavily hit by the virus, are expected to reopen while New York will remain under lockdown.
USD has benefited from news that the Eurozone’s Finance Ministers struggled to agree on a coronavirus response, leaving the EU in a shaky state of relations as a divide grows between northerly countries like Germany and Austria and southernly countries including Italy and Spain.
‘Greenback’ investors remain poised for the release of the last Federal Open Market Committee’s (FOMC) minutes today. Any downbeat comments about the US economy, however, would prove USD-negative.
Pound (GBP) Rises as UK Coronavirus Cases Moves in ‘Right Direction’
The Pound (GBP) edged higher after UK Prime Minister Boris Johnson’s condition in intensive care was described as ‘stable’ by Downing Street.
However, with Dominic Raab, the Foreign Minister, now deputising for the PMI, there’s fears that the political vacuum at the heart of Government could impede the UK’s coronavirus developments.
Tobias Ellwood, the Conservative Party’s former Defence Minister, urged more transparency, however, saying:
‘It is important to have 100% clarity as to where responsibility for UK national security decisions now lies. We must anticipate adversaries attempting to exploit any perceived weakness.’
Sterling has benefited from optimism over the UK’s handling of the coronavirus after Sir Patrick Vallance, one of the Chief Advisers to the Government, said that the number of cases was ‘moving in the right direction’. He also added that it was now ‘possible that we’re beginning to see… the curve flattening’.
GBP/USD Forecast: Could Sterling Rise on PM’s Return to Health?
US Dollar (USD) investors will be awaiting tomorrow’s release of the US Initial Jobless Claims report for April. Any further signs of chronic unemployment in America would prove USD-negative.
Tomorrow will also see the release of the flash Michigan Consumer Sentiment Index for April, which is expected to ease from 89.1 to 75. As a result, we could see the GPB/USD exchange rate continue to rise.
The GBP/USD exchange rate will, however, remain sensitive to news of Boris Johnson’s health. If the PM shows any signs of recovery and a return to normal duties in the coming days, we could see Sterling edge higher against some of its peers.
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