GBP/USD Forecast: Pound to US Dollar Exchange Rate Weakens on Sour Market Mood

July 30, 2021 - Written by John Cameron

STORY LINK GBP/USD Forecast: Pound to US Dollar Exchange Rate Weakens on Sour Market Mood

The Pound to US Dollar (GBP/USD) exchange has weakened today as a lack of economic data from the UK does little to support the appeal of Sterling

At the time of writing the GBP/USD pairing are trading at around $1.3958 as a sour market mood and positive US personal spending figures bolster the US Dollar.

Pound Sterling (GBP) Exchange Rate Muted on Lack of Economic Data

The Pound has been muted against the US Dollar for much of the day as a lack of economic data from the UK limits the appeal of GBP.

Whilst positive coronavirus developments from the UK have been the main catalyst for movement in the Pound all week it was not enough to bolster the Pound higher heading into the weekend.

It comes as Labour Leader Kier Starmer urges the government to bring forwards self-isolation changes sooner than the 16th August, speaking earlier today he said:

‘We have got to find a way forward here. We're seeing a real summer of chaos, you can see the impact it is having on so many businesses, so many sectors. The government has never really explained the logic of its 16 August date on isolating.’

‘Welsh Labour has obviously taken the lead on this and said in clear terms that if you're double vaccinated, you don't need to self-isolate from 7August. I'm challenging the government: we should do the same and allow some order to come back into our lives, allow some stability for holidays and for businesses.’

US Dollar (USD) Exchange Rate Supported by Sour Market Mood

The US Dollar has been supported heading into the weekend as a sour market mood bolsters the ‘Greenback’.

Personal spending figures from the US beat forecasts, increasing to 1%, the rise was mainly driven by pharmaceuticals and food services.

Lindsey Piegza, chief economist at Stifel Financial commented on the figure, saying:

‘Consumers have a lot of pent-up demand and a lot of pent-up wealth that they’re very willing to get rid of in the marketplace by consuming goods and services. So at least for the near term, I would expect a continued positive trend.’

A volatile Euro has limited any major US Dollar gains today as the negative correlation between the pairing causes the USD to fluctuate.

GBP/USD Exchange Rate Forecast: Manufacturing PMI’s in Focus

Heading into next week, both Pound and US Dollar traders will be looking towards manufacturing PMI figures from the UK and US.

US Dollar traders will be awaiting the ISM manufacturing PMI which is expected to be the main driver of movement in the ‘Greenback’ on Monday.

The Markit manufacturing PMI from the UK is expected to give a broad overview into how the sector is currently performing.

The GBP/USD pairing will continue to be driven by any further coronavirus developments during next week’s trading.

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TAGS: Pound Dollar Forecasts