GBPUSD has recovered a cent after falling to 1.2844 yesterday, with price now making another run at the familiar 1.30 level.
GBPEUR continues to circle around 1.10 with little volatility currently available.
GBPCHF has recovered from the September low of 1.1596, to 1.19, in partial response to the Swiss National Bank making a public declaration that they would defend against their currency rising in value as secondary Covid restrictions and impacts were talked about, both on a local and global scale.
A number of mixed comments from central bank leaders have been released into the market, with little immediate impact. Isobel Schnabel from the ECB commented that markets had so far been resilient to the virus risks, but given the amount of available liquidity that has been provided, this is not a surprising outcome – you only need to look at the overall performance of the juiced up US markets.
Andrew Bailey, from the Bank of England was a bit more realistic with his commentary, by highlighting that the recovery has been very uneven across the economy. The entertainment industry has been shattered by restrictions and will take a very long time to recover – an industry that is worth 66 Billion GBP per annum to the UK. He expects to see UK Q3 activity achieve 7-10% of the pre-virus levels. Rates and policies avoided the spotlight, giving GBP little reason to jump.
Germany’s August trade balance figures were released this morning, and despite the pre-virus levels remaining out of reach, imports grew by 5.8% and exports by 2.4%, both leaping ahead of expectations. Improved trade conditions always a welcomed sight.
Have a great day.
Author: Alistair Hutson, Senior Relationship Manager
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