- Pound (GBP) is extending gains for a third straight day, despite negative rate concerns and Brexit anxieties.
- Investors look ahead to Chancellor Rishi Sunak’s attempt to battle the coronavirus crisis
- US Dollar (USD) is edging higher on safe haven flows as covid-19 cases keep growing
- Pound US Dollar (GBP/USD) exchange rate trades back over US$1.25
Pound US Dollar exchange rate settled +0.15% at US$1.2493. At 06:15 UTC, GBP/USD trades +0.13% at US$1.2510, towards the upper end of the daily traded range in a quiet start to trading.
The Pound advanced in the previous session despite concerns growing over the Bank of England taking the unprecedented step of taking interest rates negative. The Pound received a solid boost following construction PMI data which showed that the sector unexpectedly surged back into expansion as construction sites reopened in June.
Today the focus is on Brexit talks, as the two sides continue to battle through negotiations in an attempt to reach a trade deal before the end of the year. Talks ended early in the previous week, highlighting the differences that still remain between the two sides. However, optimism has crept in following comments from an Irish diplomat that a deal is anticipated by October.
With no high impacting UK data due for release today, investors will look ahead to Chancellor Rishi Sunak’s appearance tomorrow, who is expected to set out a relief package to help the UK economy through the coronavirus crisis. Rumours have circulated that here could be a VAT cut on the cards. Any changes to the governments job retention package will also be keenly watched.
The US Dollar is seeing some strength after selling off across the board in the previous session. The greenback is rising on safe haven flows as coronavirus numbers keep growing. Over 11.5 million cases have been reported globally.
The rising numbers are taking the shine off impressive US data on Monday. The ISM non-manufacturing PMI showed that the US’s dominant sector returned to growth. The reading jumped to 57.1 far exceeding analysts’ expectations of 50 and last month’s figure of 45.5.
