The Pound is holding steady versus the US Dollar on Thursday, after pushing higher in the previous session. The Pound US Dollar exchange rate settled on Wednesday +0.35% higher at US$1.2468.
At 07:15 UTC, GBP/USD is trading at the same level of US$1.2468 as investors continue digesting US GDP data and the Fed’s supportive position.
UK Deaths Pass 26,000
The Pound is under pressure after the number of UK coronavirus fatalities passes 26,000. The death toll jumped after the government included deaths in the community, in addition to the hospital deaths that it was counting previously. This means that the UK has the second highest death toll in Europe.
With these statistics in mind, Boris Johnson is expected to dash hopes of lock down being lifted soon. When the Prime Minister gives his first press conference later today, since his return to Downing Street he is set to say that it is too soon for any major easing measures, despite the damage that the lockdown is causing to the UK economy.
His comments will come after the car industry warns of a big hit to output. An industry body said that the car industry faces losing £8 billion due to the coronavirus output after cutting production mid -March by a third. Output is at the lowest level since the financial crisis 2009. This is important because this sector is the UK’s largest exporter and employs 800,000 people.
Jobless Claims To Increase By 3.5 Million
The US Dollar is showing resilience on Thursday, as investors digest comments by President Trump and the latest Federal Reserve monetary policy decision. President Trump harshly criticised Beijing for its handling of the coronavirus outbreak. He accused China of doing anything to prevent him for being re-elected. His comments have raised fresh tensions between the two powers, boosting safe haven flows into the dollar.
The increase in safe haven demand is underpinning the US Dollar after the Federal Reserve said that it will keep rates at 0 until US employment levels are back on track. The Fed offered a downbeat tone which dragged on the greenback.
Today investors will look ahead to the release of US initial jobless claims. Analysts are expecting jobless claims to increase by 3.5 million, taking the total to 30 million in just 6 months.
