The Pound is moving higher versus the US Dollar on Tuesday, snapping a three-day losing streak. The Pound US Dollar exchange rate settled on Tuesday -0.1% at US$1.2444 on broad US Dollar strength.
At 07:15 UTC, GBP/USD is trading up +0.2% at US$1.2465 as the number of UK coronavirus fatalities fall and as investors look ahead to service sector PMI data from both US and UK.
UK Service Sector PMI Bottom
The number of daily covid-19 deaths has fallen to the lowest level since late March on Monday. 288 deaths were recorded, a signal that the UK’s crisis is continuing to slow from its peak in mid-April.
The figures come as the UK starts to prepare to ease lock down measures. The NHS tracing app will be launched today in the Isle of Wight and is part of the government’s Test, Track, Trace strategy. Later this week Boris Johnson will set out the UK’s exit strategy to ease lockdown measures and reopen the economy.
Today investors will turn their attention towards the UK service sector purchasing managers index (PMI) for further clues as to the devastation that the coronavirus crisis has inflicted on the UK economy. The very measures implemented to slow of the spread of the virus resulted in demand in the service sector evaporating.
Analysts are expecting the service sector PMI to plunge to 12.3 in April, down from 34.5 in March. The data would reflect the full month of lock down. However, with the UK economy expected to reopen over the course of May, the April reading is also expected to be a bottom.
US ISM Non-Manufacturing PMI To Hit Record Low
The US Dollar is edging lower in early trade on Tuesday as optimism over economies reopening across the globe overshadows elevated tensions between US and China. Trump’s efforts to pin the blame for coronavirus on Beijing boosted safe haven demand on Monday. However, mixed messages from the White House overnight have eased fears of further trade tariffs, for now.
Investors will now look ahead to US ISM non-manufacturing PMI. Analysts are expecting the reading for April to fall to 32. This will be a record low for the 23-year-old survey. The closely watched employment and new orders components are expected to plunge to record lows. Weaker than forecast data could boost the safe haven dollar.
