Heading into the new week, GBP is still holding above the major psychological levels against the US dollar and euro. Despite some dollar strength on Friday, which saw cable retract to nearly hit the 1.30 mark, buyers have propelled the rate back towards 1.3050 at the time of writing. This means GBPUSD has gained nearly 15.5% from the historic low in March.
GBP is currently riding a wave of enthusiasm after last week’s Bank of England Monetary Policy Committee meeting, where the central bank announced that interest rates would not be lowered or turn negative, and would remain unchanged at 0.1%. Matching this up with an improved sentiment in the Brexit trade talks and a pick up in the global stock markets, GBP is sitting in a comfortable position.
It is a light day on the economic calendar today. However, tomorrow is a new day, where we see unemployment data released from the UK for the last 3-month period. As the economy has started to open up more, analysts are not predicting too much of a change from the previous reading. However, with the furlough scheme having an end in sight, it could be enough for some employers to feel the need to release their staff. The reading will be announced at 8:30am Tuesday morning, so Sterling could be in for a bumpy ride at the open in Europe.
Down in Australia the BBC is reporting that the country has had their largest day of fatalities due to Covid. This comes after emergency measures were put in place in the state of Victoria, after a second wave of infections started to spread. This leaves GBPAUD slightly above 1.8250, reversing the previously hawkish trend from last week.
Author: Jack Nicholls, Relationship Manager
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