The pound to US dollar exchange rate remains in a tighter trading range as investors eagerly await more Covid-19 developments and crucially how and when the US relaxes its lockdown measures. Rates for GBP vs USD have hit a high of 1.2502 today, at the time of writing.
This week’s focus is likely to focus on the impact of coronavirus on the global economy and the fact that oil prices today have slumped to their lowest level in decades with US crude falling by 20%. US President Donald Trump has also given guidance to governors outlining a three-point plan to “Open up America again”. How this moves forward is also likely to generate huge interest and volatility for the GBP to USD exchange rate. The 3-phase plan for AMerica is set out below:
- Phase 1 will likely include existing lockdown measures, but some large venues may be allowed to re-open under strict physical distancing protocols.
- Phase 2 will be moved on to if there is no spike in cases once again after Phase 1 has been introduced and will allow for further easing of measures.
- Phase 3 will take place in states where there is a clear downward trend in cases and which will allow further public interactions with some physical distancing in place.
UK & US Economic Data to Influence GBPUSD
US existing homes sales for the month of March are released on Tuesday whilst UK unemployment data for the month of March is all released tomorrow morning which should be keenly viewed to give some real indication as to the impact Covid-19 had on the British labour market.
Those clients looking to buy or sell dollars would be wise to plan around these events and consider taking the uncertainty out of the volatile currency markets.
US Unemployment Data Paints Worrying Picture for Labour Market
US continuing jobless claims will be released on Thursday and will likely result in further volatility for the dollar. There have been millions of job losses in the US as a result of Covid-19 and any further increase in the numbers will likely create further uncertainty for the dollar. In California alone there are more than 2 million Americans out of work and footage over the weekend showed thousands of cars lining up at a food bank in LA. It highlights how serious the pandemic is in the US which still has not yet seen a peak in the numbers.
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.