Pound US Dollar (GDP/USD) to Dip on Positive JOLTs Data?

ByBarbara Byrne

Aug 9, 2021

The Pound/US Dollar (GBP/USD) exchange rate has seen wavering movement today as trader’s sentiment fluctuated in the run-up to this afternoon’s US job openings data. Two Federal Reserve policymakers will give speeches this afternoon, this speech is predicted to have the potential to boost the US Dollar (USD). Currently, the Pound (GBP) is trading at $1.3885, strengthening this morning’s marginal profits.

US Dollar Strengthens

The USD confronts an abundance of incentives this week, beginning with this afternoon’s June’s JOLTs job openings figures. New job openings have been issued at 10.073 million – which is an increase on last month’s 9.209 million and surpassing calculations by about 792,000. Job vacancies improved in various businesses, with the biggest profits in professional and business industries, retail trade and accommodation as well as food services.

The JOLTs figures point out that firms are striving to attract workers as the economy reopens from the pandemic: although some firms did manage to employ more workers, with 6.7 million hires in June, up 697,000 from May. However, for now, the figures haven’t triggered any major movement in the GBP/USD exchange rate. Following on from JOLTs job openings, two speeches are slated, by Federal Reserve policymakers Raphael Bostic and Thomas Barkin.

FEDs Speech

The bank’s state presidents are expected to give clarity on the central bank’s forward guidance, possibly hinting at whether the Fed will begin tapering soon. Following the previous week’s strong Non-farm Payrolls report and unemployment data, investors have already commenced factoring in looming monetary policy tightening measures.

A speech by policymaker Charles Evans tomorrow will be followed by inflation data on Wednesday and jobless claims on Thursday. The former is expected to print at 5.3% – down just 0.1% from last month – while jobless claims look to fall by 10 thousand. If the data prints as expected, the Pound US Dollar exchange rate is likely to plunge. Additional speeches by Raphael Bostic and Esther George will probably contribute further clues as to the Fed’s existing economic outlook.

Pound (GBP) Open to Losses

The Pound traded high last week on positive forward guidance from the Bank of England (BoE) and above the predicted PMI figures. The UK also saw a fall in the number of coronavirus infections. This week, however, Sterling faces headwinds as UK data is limited till Thursday. Domestic Covid cases have also increased again, from 26,200 last Thursday to 26,866 by Saturday.

Despite this, the tension upon the Pound doesn’t seem to be having much of a negative effect. This may be on account of the country’s favourable stance regarding the end of the pandemic. Professor Balloux, director of the Genetics Institute at University College, London declared to the BBC that he imagines that the pandemic is ‘nearly’ over; he expects ‘a few flares and outbreaks’, but is ‘pretty confident’ that in countries with high rates of vaccination, the pandemic phase of the virus will be over by spring.

In other news, a glut of data will be published on Thursday, including GDP and industrial production figures. Regarding the former, GDP is measured to have grown by 4.8% in the second quarter – which, if confirmed, could significantly elevate the Pound US Dollar exchange rate. Industrial production, meanwhile, is expected to rise by 0.3% which is a small increase, but one which would reveal an uptick in manufacturing activity and industrial output as society reopens.

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