Pound to Dollar Rate Drops to 1.36

The pound was unable to find a firm footing that would allow it to jump higher yesterday, having arrested its slide lower, after the UK vaccination campaign hit fresh snags. The nation is facing a “significant reduction” in the supply of doses during April, meaning older people waiting for a second dose will be prioritised over younger people waiting for their first jab.

Meanwhile, medical regulators in the UK have advised that under-30s should not receive the Oxford AstraZeneca vaccine in a “course correction” to the country’s rollout plan – a decision that was prompted by fears that the jab may be linked to rare blood clots.

Upbeat figures from the construction industry were unable to inspire the pound. Britain’s current lockdown has not prevented a building boom, according to new data that showed construction activity hit a six-and-a-half-year high last month. IHS Markit’s purchasing managers’ index registered at 61.7 in March – the highest reading since September 2014 as the sector recorded a sharp acceleration from February’s figure of 53.3.

Buyer enquiries, agreed sales and house prices have been given fresh impetus by the stamp duty holiday extension, according to the latest RICS survey results. A net balance of 59% of respondents cited an increase in house prices at the national level over the latest survey period. This marks a slight rise in each of the last two months, although the latest reading remains below the recent high of 66% posted in October.

By this morning, however, the pound to dollar rate had slipped to 1.36 for the first time in two weeks.

US Weekly Jobless Claims Rise Unexpectedly

Worker filings for jobless claims unexpectedly rose for a second week, underlining the uneven nature of the labour market recovery in the US. Initial claims in regular state programmes increased from 728,000 to 744,000 in the week ended April 3, Labour Department data showed on Thursday – exceeding forecasts of a fall to 680,000 claims.

Despite the unexpected rise, claims remain near the lowest point since mid-March of last year, when the pandemic triggered largescale job losses; but are still well above the weekly average of around 220,000 in the year before the pandemic began.

Looking Ahead

This week rounds off in the UK with the Halifax House Price Index and the Bank of England Q1 Quarterly Bulletin this morning.

The Producer Price Index (excluding food and energy) is scheduled for release from the US today. This measure of the average changes in prices in primary US markets is forecast to rise by two percentage points to 2.7% – potentially lending the dollar some support.

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