- GBP/USD finds buyers from 1.3059/58.
- US dollar less in favour as equities, ex-USD currencies gain.
- Coronavirus vaccine hopes and Sino-China trade optimism helps the risk-on bulls.
- Jackson Hole Symposium later in the week awaited.
GBP/USD rose to 1.3105 in the trading before Tuesday London market opening, reviving from the two-day fall due to the Brexit pessimism and dollar strength. Today’s advantage is mostly a reflection on the improved US-China trade talk situation and the hopes of preventing the coronavirus.
The European calendar for the day is scarce, and traders will wait for the US session for fresh catalysts.
The US-China trade negotiators agreed to pursue a better course of action to ensure the success of phase one deal, as the warning from the US health officials against the administration’s rush for the coronavirus vaccine was pushed to the backburner by the market. The push for the vaccine had lifted the market sentiments on Monday and had also helped the dollar. The news of receding virus cases in Florida and the UK further assisted the positive mood.
The risk-off camp had garnered strength from the breakdown in Brexit talks even though the latest government data showed increased, though cautious, optimism among business houses in the UK. The pound was also affected by the French retaliation to the UK’s “no go” list as they imposed a 14-day quarantine to all inbound persons from Britain.
Elsewhere, UK Chancellor Rishi Sunak might help Facebook even though PM Boris Johnson earlier wanted to impose a fine on the company.
S&P 500 and FTSE 100 are in the green along with Asia-Pacific shares which continued yesterday’s good run. The US Treasury 10-year yields are at 0.66 Percent, up by two basis points.
The US Consumer Confidence and second-tier housing data are due later. While Britain’s CBI Distributive Trades Survey for August, expected at 8 Percent against 4 Percent previous could act as an interim trigger. Nevertheless, market action will keep in mind the upcoming Jackson Hole Symposium speech by the BOE Governor Andrew Bailey on Friday.