Home GBP GBP/USD: Pound Eyes $1.26 Ahead of Sunak’s Summer Statement

GBP/USD: Pound Eyes $1.26 Ahead of Sunak’s Summer Statement

8th July 2020

Brexit optimism lifts Pound (GBP) after Michel Barnier hints at compromise over UK fisheries
Chancellor Rishi Sunak’s Summer Statement in focus
US Dollar (USD) supported by Fed concerns over rising coronavirus numbers
Pound US Dollar exchange rate (GBP/USD) extends gains for 4^th straight session

The Pound US Dollar exchange rate settled on Tuesday +0.4% at US$1.2542. At 06:15 UTC, GBP/USD trades +0.1% at US$1.2556.

Check real time GBP to USD exchange rate

The Pound pushed higher in the previous session on the announcement that EU chief negotiator Michel Barnier was coming to London and would dine with his UK counterpart David Frost. The two discussed the sticking points in the post Brexit trade talks in an informal environment. Michel Barnier hinted that the EU could be ready to compromise on EU access on UK fishing grounds. The so-called level playground remains a point of contention. Even so, Pound investors are optimistic that momentum has been injected into the talks, boosting hopes that a deal could be reached in time.

Attention will now turn squarely to Chancellor Rishi Sunak and his mini budget which is set to lay out the governments fiscal stimulus plans to guide the UK out of the coronavirus crisis. A stamp duty holiday is expected to be the central piece. Any update of the evolving furlough scheme will also be closely eyed.

Despite falling versus the Pound, the US Dollar traded broadly higher versus its peers in the previous session and was holding those gains in early trade on Wednesday.

The Dollar remains well supported as investors seek out its safe haven properties amid growing concerns over rising coronavirus cases and the return to lockdown in parts of some countries.

Risk sentiment was also undermined by concerns expressed by the Federal Reserve that rising coronavirus numbers in the US could undermine economic growth at a crucial moment in the recovery as stimulus measures start to expire.

There is no high impacting US data due today. Instead coronavirus statistics and sentiment will drive movement in the greenback ahead of Thursday’s jobless claims figures.