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Pound to US Dollar (GBP/USD) Exchange Rate Edges Higher Despite Growing Risk-Off Mood

September 9, 2021 - Written by John Cameron

GBP/CAD Exchange Rate Rises Despite Strong US Jobs Data

The Pound US Dollar (GBP/USD) exchange rate rose by 0.2% despite growing demand for the safe-haven ‘Greenback’ as concerns grow over new variations of Covid-19, which could potentially evade vaccination. The pairing is currently trading around $1.38.

As a result, souring risk sentiment has driven-up demand for the US Dollar. But this has not been enough to strengthen the USD/GBP exchange rate.

Yesterday also saw positive US economic data in the form of the latest JOLTs job openings figure, which soared to a new record high in January.

Lucia Mutikani, writing for Reuters, said:

‘Job openings, a measure of labor demand, jumped 749,000 to 10.9 million on the last day of July, the highest level since the series began in December 2000. It was the fifth straight month that job openings, which have been increasing since January, hit a record high.

‘Economists polled by Reuters had forecast vacancies rising to 10 million. July's broad increase was led by the healthcare and social assistance, finance and insurance, and accommodation and food services industries.’

Today saw the release of the latest US jobless claims data for the week ending September 3, which beat forecasts and fell from 345,000 to 310,000, further buoying confidence in the US labour market.

Pound Exchange Rate Edges Higher as Furlough Scheme Winds Down

The Pound (GBP) rose today following news that the UK furlough scheme wound down in July, with the economy reopening and a wide-spread vaccination programme.

Chancellor Rishi Sunak said:

‘It’s fantastic to see furlough levels at their lowest since the start of the pandemic with young people in particular getting back to work and kickstarting their careers as the UK gets back to business.’

As a result, confidence in the UK economy has returned, with hopes that employment will rise in the months ahead as the economy remains open.

However, the Bank of England’s (BoE) Governor, Andrew Bailey, has warned that the economic recovery is slowing down.

Also, if Covid-19 infections and hospitalisations continue to rise, we could see the Pound suffer as fears of a possible lockdown next month dampens economic mood.

GBP/USD Exchange Rate Forecast: Could Strong UK Growth Boost Sterling?

Pound (GBP) traders will be looking ahead to tomorrow’s release of July’s GDP data. Any improvement in UK economic growth would be GBP-positive.

Tomorrow will also see the latest industrial and manufacturing production figures. If these indication a strong economy, then the GBP/USD exchange rate would head higher.

US Dollar (USD) traders will be eyeing tomorrow’s release of the latest inflation data. Could an improvement in the outlook for the US economy drive-up the USD/GBP exchange rate?

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TAGS: American Dollar Forecasts Pound Dollar Forecasts

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