- Boris Johnson announced that the UK economy will ease more lockdown restrictions on 4th July
- Pound (GBP) nervous after scientists criticise reduction of 2-meter rule
- US Dollar (USD) lacks direction amid encouraging data on Tuesday and covid-19 hotspots
- Pound US Dollar exchange rate (GBP/USD) extends pull back from overnight high of US$1.2543
After two straight sessions of gains the Pound is treading water on Wednesday awaiting fresh catalysts. The Pound US Dollar settled on Tuesday +0.45% at US$1.2520.
At 06:15 UTC, GBP/USD trades flat as investors continue digesting the easing of lock down measures in Britain and on a quiet day for economic data.
Boris Johnson announced yesterday that hairdressers, theme parks pubs and restaurants can reopen in early July as he attempts to salvage the economy, and particularly the hard hit hospitality sector.
Boris Johnson also reduced the 2-meter rule down to 1, a move which he has also been criticised for by scientists. It has been reported that someone is 10 times more likely to catch covid-19 at 1 meter, than 2. The criticism from scientists over the speed of the reopening has unnerved Pound buyers.
Brexit concerns linger, adding pressure to the Pound ahead of Brexit trade talks next week. The Financial Time newspaper has suggested that the British government will push for market access in this next round, after the government published plans to maintain the “highest standard” in financial regulation.
The UK economic calendar is light today, leaving sentiment and the US Dollar in the driving seat for the pair.
The US Dollar is holding steady as the European session begins as investors continue to weigh up data and economic recovery hopes against rising coronavirus cases in some US hotspots.
On Wednesday, PMI data showed that business activity in the US, the worlds’ largest economy continued to rebound in June, after hitting a nadir back in April. US home sales data was also extremely encouraging as home sales jumped 16.6% in May, after declining -5.2% in April.
With data showing that the US economy is moving in the right direction the safe haven US Dollar has been under pressure. However, rising coronavirus cases in states such as Texas, California, Florida and Arizona are keeping risk sentiment in check.
