April 1, 2021 – Written by John Cameron
GBP/USD Exchange Rate Rangebound as ‘Greenback’ is Buoyed by Safe-Haven Demand
The Pound US Dollar exchange rate held steady today following President Joe Biden’s announcement of a $ 2 trillion infrastructure stimulus package. The pairing is currently fluctuating around $ 1.37.
Mr. Biden commented on the stimulus plan:
‘It is not a plan that tinkers around the edges. It is a once-in-a-generation investment in America.’
He also added:
‘The divisions of the moment shouldn’t stop us from doing the right thing for the future. I’m convinced that if we act now, in 50 years people are going to look back and say this is the moment when America won the future.’
As a result, the outlook for the US economy has improved, buoying market confidence in the world’s largest economy.
However, the ‘Greenback’ has benefited from its safe-haven status as Covid-19 cases continue to rise throughout Europe.
In US economic news, today will see the latest ISM Manufacturing PMI.
Any improvement in the US manufacturing sector would further prove USD-positive.
Pound (GBP) Exchange Rate Struggles Despite Strong UK Manufacturing PMI
The Pound (GBP) failed to rise against the US Dollar (USD) despite the latest UK Manufacturing PMI for March beating forecasts and rising to 58.9.
Duncan Brock, the Group Director at the Chartered Institute of Procurement and Supply, commented on the data:
‘The floodgates to new business, rising confidence and more jobs were opened in March with the highest index level since the last recession and green shoots of recovery popped up across the UK as the global marketplace improved.’
However, UK markets are remaining cautious as Covid-19 infection rates continue to soar throughout Europe.
Prime Minister Boris Johnson has previously warned about rising coronavirus cases in the UK, saying they could wash-up in Britain, potentially threatening to planned easing of lockdown measures this month.
Sentiment in Sterling remains relatively high, however, with the outlook for the UK economy brightening as we head towards further easing of lockdown restrictions this month.
Pound US Dollar Exchange Rate Forecast: US NonFarm Payrolls Data in Focus
US Dollar (USD) investors will be looking ahead to tomorrow’s release of the latest US Nonfarm Payrolls for March.
Any improvement in the US economy could further boost the USD/GBP exchange rate.
Tomorrow will also see the publication of the latest US Unemployment Rate report for March.
If unemployment continues to rise, however, then we could see the ‘Greenback’ begin to suffer.
UK markets are closed tomorrow for Good Friday.
However, we could see the Pound US Dollar exchange rate head higher if the outlook for the British economy continues to improve as Covid-19 infection rates continue to drop.
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TAGS: American Dollar Forecasts Pound Dollar Forecasts