The Pound to US Dollar (GBP/USD) exchange rate traded in a narrow range on Monday as markets reacted cautiously to Andy Burnham’s first speech as UK Prime Minister.
At the time of writing, GBP/USD was trading at $1.3449, little changed on the day.
Pound to Dollar (GBP/USD): 1.342145 (-0.24%)
Euro to Dollar (EUR/USD): 1.141269 (-0.22%)
Dollar to Yen (USD/JPY): 162.49831 (+0.06%)
DAILY RECAP:
The Pound (GBP) lacked a clear catalyst on Monday, amid a muted reaction to Andy Burnham’s first speech as Prime Minister.
The PM’s address was big on vision but light on policy detail, with Burnham saying he would announce some cost-of-living measures – and how to fund them – on Tuesday.
As a result, the speech left GBP investors with little to go on, leading to subdued movement in the Pound.
Meanwhile, UK economic data was thin on the ground, which also limited Sterling.
The US Dollar (USD) also traded in a relatively narrow range on Monday, with USD initially dipping as markets opened before recouping its losses as the session went on.
Escalating tensions in the Middle East helped the US Dollar find its footing after the initial downside, although markets remained surprisingly resilient.
Although the crisis is intensifying, with the US and Iran continuing to launch attacks at one another, there are still hopes that the peace process can get back on track.
A spokesman for the Iranian foreign ministry said on Monday that diplomatic exchanges between Washington and Tehran are ongoing.
Near-Term GBP/USD Forecast: UK Jobs Report in Focus
Looking forward, Tuesday kicks off with the UK’s latest jobs report.
Markets expect unemployment to have ticked up in the three months to May, rising from 4.9% to 5.0%. However, a forecast increase in employment may help limit Sterling’s downside.
GBP investors will also be watching wage growth, with stronger earnings potentially providing additional support for the Pound.
As for the US Dollar, market risk appetite is likely to remain the main driver. If tensions in the Middle East continue to intensify, a more risk-averse mood could support demand for the safe-haven currency.
