May 18, 2021 - Written by John Cameron
STORY LINK GBP USD Forecast Pound to US Dollar Exchange Rate Strengthens
The Pound to US Dollar (GBP/USD) exchange has strengthened today following the latest employment data from the UK.
At the time of writing the GBP/USD pairing are trading at around $1.4194 as an upbeat market mood weighs on the US Dollar.
Pound Sterling (GBP) Exchange Rate Supported by UK Employment Data
The Pound has been supported against the US Dollar today following the latest employment data from the UK.
Although markets had expected unemployment to edge up to 5% during March as much of the country remained under strict lockdown measures, a fall in unemployment instead helped to bolster Sterling.
The UK unemployment rate in Q1 fell to 4.8%, 0.3% lower than the previous quarter, figures from the Office for National Statistics (ONS) have shown today.
Hannah Slaughter, economist at the Resolution Foundation, commented on the latest data, saying:
‘The labour market has entered a new phase, starting to recover in April as the economy reopens, with the number of payrolled employees increasing by almost 100,000. Early signs are emerging of which big structural changes from the pandemic will last, with hospitality bouncing back even as jobs in high street retail are not. Adapting to this changed world will be a key challenge for workers, and policy makers, in the years ahead.’
US Dollar (USD) Exchange Rate Weakens on Upbeat Market Mood
The US Dollar has found itself down against many of its major rivals today as an upbeat market mood limits the ‘Greenback.’
As much of the globe recovers from the coronavirus pandemic, many investors are willing to take risks and head away from the safe-haven US Dollar.
More so, the Dollar continues to suffer from the Federal Reserve's (Fed) claims that rising inflation is short-term.
Markets believe that the Fed could hike interest rates much sooner than expected as the US economy enjoys a rapid recovery from the worst of the pandemic.
GBP/USD Exchange Rate Forecast: UK Inflation Rate Data in Focus
For Pound investors, tomorrow will see the release of the latest inflation rate data from the UK for April which is forecast to have risen to 0.6% month-on-month. The rise in inflation could see Sterling head higher throughout tomorrow’s session.
US Dollar traders will be awaiting the latest FOMC minute’s tomorrow evening, markets will look to see if the Fed change their stance on rising inflation and interest rates.
The GBP/USD pairing will continue to be driven by any further coronavirus developments in the coming days, with investors keeping an eye on the Indian variant of the virus.
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TAGS: Pound Dollar Forecasts