- Pound (GBP) powers high amid upbeat mood in the market, vaccine optimism
- BoE’s Andrew Bailey is due to speak later today, ahead of a raft of data releases tomorrow including UK GDP.
- US Dollar (USD) declines on cautiously optimistic tone ahead of US earning season, despite covid numbers showing no signs of slowing down
- Pound US Dollar (GBP/USD) exchange rate extends gains after jumping 1.1% across the previous week
The Pound US Dollar settled on Friday +0.1% at US$1.2622. At 06:15 UTC, GBP/USD trades +0.3% at US$1.2658.
The Pound gained ground across the previous week following extensive measures by the Chancellor Rishi Sunak to guide the UK economy out of its deepest recession in 3 centuries. The Pound advanced despite Brexit talks seeing little progress in another week of negotiations.
Further easing measures are also providing support for the Pound as consumers are once again allowed to eat out and start spending, supporting in the badly hit leisure and hospitality industry.
This week looks set to be a busy week for Sterling, with a barrage of data due to be released. Tomorrow’s GDP reading will be a highlight. In April the UK economy contracted -20.4% as lockdown was in full flow. However, Mat saw the easing of some lockdown measures. Analysts are expecting a more positive figure with 5% growth month on month.
Prior to tomorrow’s figures, Bank of England Governor Andrew Bailey is due to speak today.
The safe haven US Dollar is out of favour as investors look ahead to the start of earning season with cautious optimism. The release of second quarter results from big names such as JP Morgan, Citigroup, Goldman Sachs, Netflix and Johnson & Johnson will provide further clues as to how companies are coping in the coronavirus crisis. Earnings are expected to recover in the second half of the year and this is keeping he mood buoyant.
The focus on the economic recovery is overshadowing rising coronavirus numbers. Florida on Sunday posted its biggest rise in covid-19 cases since the US outbreak began with 15,300 new cases. Texas and South Carolina are seeing huge daily increases, although New York’s numbers remain steady.
