The Pound to Dollar (GBP/USD) exchange rate rose by 0.6% today despite the ‘Greenback’ being buoyed by rising US Treasury yields. The pairing is currently trading around $1.39.
The US Dollar benefited from a strengthening of yields this week following the passing of President Joe Biden’s historic stimulus package of $1.9 trillion.
As a result, this bolstered confidence in an economic rebound for the American economy – the largest economy in the world.
However, improved risk-sentiment has limited the appeal of the safe-haven ‘Greenback today’, hence a relatively weak GBP/USD exchange rate.
Sophie Griffiths, the market analyst at OANDA, commented:
‘Vaccine rollouts are keeping up pace, particularly in the UK and US, and economic reopening is going well so far. Conviction of a strong economic recovery is boosting risk sentiment and driving demand for riskier assets such as equities. Yesterday’s troubles of rising bond yields have been quashed, for now, and the US dollar is slipping lower.’
In US economic news, today saw the publication of the US NFIB Business Optimism Index for February, which rose to 95.8.
Consequently, confidence continues to grow in the US economy, but improving confidence in the global market has limited the appeal of USD.
Pound (GBP) Rises as UK Economic Optimism Drives Demand for Sterling
The Pound (GBP) rose against USD today thanks to growing confidence in the outlook for the UK’s economy in the months ahead.
Following UK Prime Minister Boris Johnson’s promise of an ‘irreversible’ easing of lockdown measures in the months ahead, the GBP/USD exchange rate has shown an upward trend.
In UK economic data, today saw the release of the latest British Retail Consortium’s (BRC) Retail Sales data for February, which beat forecasts and rose by 9.5%.
Helen Dickinson, BRC chief executive, commented on the report:
‘February saw a return to growth after a disappointing start to the year. The Prime Minister’s roadmap to reopening prompted a burst in spending on non-food items, such as school uniforms. Furthermore, with another month of lockdown still to go, online sales were high, rewarding the retailers who have invested digitally.’
As a result, confidence in the UK economy is growing, despite warnings from key scientific advisers that a premature easing of lockdown measures could prove a potential disaster.
Nevertheless, GBP investors remain generally confident that daily cases of Covid-19 will continue to drop, and vaccinations will increasingly be rolled out.
GBP/USD Forecast: US Inflation Data in Focus
US Dollar (USD) traders will be awaiting tomorrow’s release of February’s US Monthly Budget Statement.
Any further signs that the US economy could be on the trajectory for a significant recovery in the months ahead would weaken demand for the safe-haven currency.
Tomorrow will see the release of the US Consumer Price Index for February, which is expected to rise by 0.2%.
However, the USD/GBP exchange rate is likely to remain subdued as risk-sentiment continues to improve.
The GBP/USD exchange rate will likely continue to rise, however, as confidence in the UK economy improves as Covid-19 cases continue to drop.
The US Dollar benefited from a strengthening of yields this week following the passing of President Joe Biden’s historic stimulus package of $1.9 trillion.
As a result, this bolstered confidence in an economic rebound for the American economy – the largest economy in the world.
However, improved risk-sentiment has limited the appeal of the safe-haven ‘Greenback today’, hence a relatively weak GBP/USD exchange rate.
Sophie Griffiths, the market analyst at OANDA, commented:
‘Vaccine rollouts are keeping up pace, particularly in the UK and US, and economic reopening is going well so far. Conviction of a strong economic recovery is boosting risk sentiment and driving demand for riskier assets such as equities. Yesterday’s troubles of rising bond yields have been quashed, for now, and the US dollar is slipping lower.’
In US economic news, today saw the publication of the US NFIB Business Optimism Index for February, which rose to 95.8.
Consequently, confidence continues to grow in the US economy, but improving confidence in the global market has limited the appeal of USD.
Pound (GBP) Rises as UK Economic Optimism Drives Demand for Sterling
The Pound (GBP) rose against USD today thanks to growing confidence in the outlook for the UK’s economy in the months ahead.
Following UK Prime Minister Boris Johnson’s promise of an ‘irreversible’ easing of lockdown measures in the months ahead, the GBP/USD exchange rate has shown an upward trend.
In UK economic data, today saw the release of the latest British Retail Consortium’s (BRC) Retail Sales data for February, which beat forecasts and rose by 9.5%.
Helen Dickinson, BRC chief executive, commented on the report:
‘February saw a return to growth after a disappointing start to the year. The Prime Minister’s roadmap to reopening prompted a burst in spending on non-food items, such as school uniforms. Furthermore, with another month of lockdown still to go, online sales were high, rewarding the retailers who have invested digitally.’
As a result, confidence in the UK economy is growing, despite warnings from key scientific advisers that a premature easing of lockdown measures could prove a potential disaster.
Nevertheless, GBP investors remain generally confident that daily cases of Covid-19 will continue to drop, and vaccinations will increasingly be rolled out.
GBP/USD Forecast: US Inflation Data in Focus
US Dollar (USD) traders will be awaiting tomorrow’s release of February’s US Monthly Budget Statement.
Any further signs that the US economy could be on the trajectory for a significant recovery in the months ahead would weaken demand for the safe-haven currency.
Tomorrow will see the release of the US Consumer Price Index for February, which is expected to rise by 0.2%.
However, the USD/GBP exchange rate is likely to remain subdued as risk-sentiment continues to improve.
The GBP/USD exchange rate will likely continue to rise, however, as confidence in the UK economy improves as Covid-19 cases continue to drop.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.