GBP continued its surge from the start of the week yesterday and is now nearly 2.2% stronger against USD. The US dollar was the big loser of the day, as there were talks of more government stimulus required to lift America from the slump caused by the COVID-19 outbreak as well as protests and looting across most major US cities. This also gave the opportunity for riskier currencies such as the Aussie dollar to break higher, as the pair hit a five-month high. Australia is seen to be one of the first economies to be recovering the fastest post-COVID-19 as, along with reopening their economy, exports of raw materials to China has stepped up meaning there is a higher demand to buy AUD.
There was little to report from the negotiations between the UK and Europe as the Brexit trade talks resumed for the final time before the extension date of June 30th. As mentioned in previous updates, the two have until that deadline to request for an extension, even with the COVID-19 outbreak disrupting matters, it is expected for the UK to leave the bloc at the end of 2020. Traders have been bullish on the talks, with the pound gaining strength throughout the course of the week. There seems to be an air of optimism that the two will reach an agreement. With negotiations such as these, a deal seems to always be struck at the eleventh hour.
Today sees a whole host of data releases across Europe and America. The Eurozone is releasing employment data, which will show how the economy is coping after the COVID-19 outbreak. Traders are expecting the figure to rise, which could leave GBP more room to power on and continue its good start to the week.
Have a good day,
Author: Jack Nicholls, Relationship Manager
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