- Pound (GBP) advances as more lockdown measures eased
- Lloyds reports UK business confidence at lowest level since 2008 financial crisis
- US Dollar (USD) lower ahead of Trump’s response to China’s crackdown in Hong Kong
- At 07:15 UTC, GBP/USD is trading +0.2% at US$1.2341 >> Real time exchange rate
The Pound is pushing higher versus the US Dollar for a second straight session on Friday. GBP to USD exchange rate settled on Thursday +0.5% at US$1.2320, towards the upper end of its daily traded range.
At 07:15 UTC, GBP/USD is trading +0.2% at US$1.2341 near its weekly high. The pair is on track to gain 1.45% across the week in its second straight week of gains. Across the month of May, the Pound is down 2% versus its US counterpart.
The Pound is advancing today after Boris Johnson revealed further lockdown easing measures. Restrictions will be reduced next week for most of the UK’s population, with groups of 6 being allowed to meet in gardens. The light at the end of the lockdown tunnel is drawing closer. The UK economy is expected to start reviving up over the next two weeks, lifting demand for the Pound.
Pound investors continue to brush off dismal data. According to Lloyds bank business confidence fell to the lowest level since the 2008 financial crisis in May, reflecting reduced optimism and hiring opportunities. The figures contradict other data such as PMI’s which showed that the contraction in activity slowed this month.
Any gains in the Pound will be limited by Brexit uncertainty. EU Trade Commission Phil Hogan suggested that the UK could already given up on a deal.
With no economic data due today, the US Dollar could be the stronger driving force.
The Dollar is trading broadly lower versus its major peers despite US – Sino tension reaching boiling point. Tensions between the two powers have been simmering across the week, triggered by China imposing national security laws on Hong Kong and Macau. China’s National People’s Congress approved the law yesterday.
President Trump will hold a news conference on China later today, where he is expected to announce his response to the crackdown on democratic freedom in Hong Kong. The conference is also likely to touch on the covid-19 outbreak, trade and currency wars. The tone that Trump adopts and the measures that he announces could provide fresh direction for the US Dollar.