The pound to US dollar exchange rate has moved lower with rates having fallen to below 1.24 for the GBP vs USD pair. UK unemployment data for February is released this morning and should be keenly watched as it will also contain the claimant count change for the month of March when the UK’s lockdown commenced. UK unemployment is widely expected to double in the coming months to a figure of around 8%. UK Purchasing Managers Index Data for the manufacturing and services sectors for the month of April are released on Thursday and should give some indication as to the health of these sectors. Considering the services sector represents such a large component of the British economy then any major changes could see considerable volatility for sterling dollar exchange rates.
Uk Government Insists There Will Be No Brexit Extension
Brexit is just starting to make the airwaves again as trade discussions resume this week. The British government insists that it will not extend beyond the end of 2020 deadline, despite reports that have emerged suggesting the government may need to extend. As we have seen over the last three and half years any talk of a Brexit that would leave Britain trading on WTO rules has left the pound on a weaker footing against the US dollar. As new Brexit developments emerge there is likely to be high volatility for the GBP to USD pair. Those looking to buy or sell dollars would be wise to consider planning around these developments.
Northern American Countires Extend Lockdown Restrictions
Meanwhile the US, Canada and Mexico have all agreed to extend restrictions for another 30 days to try and stop the spread of the virus ahead of any reopening of the economy. US President Donald Trump has also announced on Twitter that he will temporarily suspend immigration to the US as the global death toll has now reached 170,000 a second wave of infections has been seen in Singapore having reported 1426 new coronavirus cases in a single day. These new details highlight how delicate this recovery across the glove is likely to be and how rates for GBPUSD will likely continue to be impacted. It all comes at a time when the US is seeing some small protests against the lockdown.
If you’d like to discuss these factors and how they could impact an upcoming currency transfer, feel free to get in touch with me, James Lovick, using the form below.