The Pound to US Dollar exchange rate has fallen this afternoon after the BoE kept interest rates unchanged at 0.1%.
At the time of writing the pairing are currently trading at around $1.3914.
As fresh concerns over the UK’s vaccine rollout being delayed causes investors to be cautious.
Pound (GBP) Suffers over Delayed UK Vaccine Supplies
The Pound US Dollar exchange rate has suffered this afternoon after a slowdown in the UK’s vaccination programme is reported due to a delayed delivery of doses.
Speaking earlier today to MP’s, Health Secretary Matt Hancock commented on the delay:
‘Throughout the vaccination programme, the pace of rollout has always been determined by the availability of supply.’
‘In the last week, we’ve had a batch of 1.7 million doses delayed because of the need to retest its stability. And we have a delay in a scheduled arrival from the Serum Institute of India.’
The delay in vaccines has worried Pound investors that the reopening of the UK’s economy may not happen as quick as expected.
Furthermore, the BoE’s decision to keep interest rates unchanged whilst raising growth expectations has been met with caution from analysts.
Silvia Dall’Angelo, Senior Economist at the International Business of Federated Hermes said:
‘The tone of the meeting has remained cautious, in line with the stance adopted by the other major central banks over the last week.’
‘The Bank of England is facing the same cross-currents: since its previous meeting in February, most developments – notably fresh rounds of fiscal stimulus domestically and abroad – have had positive implications for the economic outlook, but downside risks and uncertainty concerning the evolution of the pandemic are still prominent.’
US Dollar (USD) Steady Despite Jump in US Jobless Claims
The US Dollar has remained steady against the Pound despite a rise in initial jobless claims data from the US.
The US Labor Department reported 770,000 claims for jobless benefits last week, an increase of 45,000 from the previous week.
Nancy Vanden Houten an analyst at Oxford Economics spoke on the latest jobless claims data, saying:
‘The elevated level of claims — still higher than the global financial crisis peak –- underscores why the Fed will be extremely patient before making a policy change and not act pre-emptively.’
It comes as yesterday evening the Federal Reserve chose to keep its interest policy at near 0% until 2023.
Which at first caused the US Dollar to slump, however an increase in US Treasury yields allowed the ‘Greenback’ to rally against many of its competitors today.
Pound US Dollar Exchange Rate Outlook: UK Gfk Consumer Confidence to Damage Sterling Sentiment Further?
For Pound investors tomorrow sees the release of the Gfk consumer confidence index for March which is expected to come in at -20.
If the data matches forecasts it’ll be the highest reading since March last year. Indicating that consumers are becoming more optimistic about the UK’s recovery.
In absence of any notable data USD will be driven by movement in US treasury yields.
As US treasury yields push above 1.7%, a 14-month high, the US Dollar could see renewed support.
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