The exchange rate for the British Pound and the US Dollar (GBP / USD) was contrasted for much of the day as a hawkish tone from the Federal Reserve (Fed) helps the “greenback” strengthen.
The GBP / USD pair is currently trading around the $ 1.4129 level amid concerns over the Indian variant of the coronavirus found in the UK is limiting the pound sterling.
Pound (GBP) Limited by UK Coronavirus Concerns
The pound has found itself constrained against the US dollar as concerns over the Indian variant of the coronavirus prompt investors to remain cautious.
While people aged 34 to 35 were urged today to receive a dose of the NHS coronavirus vaccine, cases of the Indian variant continue to rise.
Nearly 3,000 cases of the Indian variant of the virus have now been discovered across the UK, with some scientists warning that the variant could cause a third wave of the virus.
The PM’s spokesperson this afternoon said it was ‘too early’ to know whether the variant would derail England’s roadmap out of lockdown:
“At the moment, we are monitoring the data very closely. There have still not been any significant changes, like yesterday, which currently suggest that we need to change our course of action.
“We are watching this very closely, but it is still too early to make a final judgment. We will be monitoring the data, crucially both on hospitalization rates in these outbreak areas and on ongoing work on transmissibility – both of these works are ongoing, so we will endeavor to update them as soon as possible. next week.
US dollar (USD) backed by the Hawkish Federal Reserve
The US dollar was supported for much of the day following the release of the latest Federal Open Market Committee (FOMC) meeting minutes.
The ‘greenback’ found support from news that policymakers could start progressive talks ‘at some point’ in the near future, which was refuted by Fed Chairman Jerome Powell .
The minutes read: “A number of participants suggested that if the economy continued to move rapidly towards the Committee’s objectives, it might be appropriate at some point in future meetings to start discussing a plan to adjust the pace of asset purchases.
More so, this afternoon saw the release of the last initial jobless claims in the United States, which showed the number of people filing new jobless claims has fallen to a new pandemic low.
There were 444,000 new initial requests ending in week 15e That the Bureau of Labor Statistics report.
British Pound Exchange Rate Outlook: UK Retail Sales at a Glance
For sterling investors, tomorrow will see the release of the latest UK retail sales figures for April.
Retail sales are expected to have jumped 37% annually, with much of the high street reopening in April as foreclosure restrictions were relaxed.
USD traders will look to the latest preliminary US Markit PMI numbers. While the numbers are not as influential as the ISM PMI release, the report should give some indication of the performance of the US economy.