- Pound (GBP) pushed northwards despite concerns over rising covid numbers
- Lockdown restrictions are tightening in parts of the country and London could be next
- US Dollar trades lower, Trump agrees in concept to Oracle’s purchase of TikTok
- Eyes will look to US Congress for signs of additional fiscal stimulus
The Pound US Dollar (GBP/USD) exchange rate is pushing higher on Monday, extending gains from the previous week. The pair settled on Friday up 1% across the week at US$1.2915, down around 100 points from the weekly high of US$1.3008. At 06:15 UTC, GBP/USD trades +0.3% at US$1.2958.
The Pound is pushing higher despite concerns over rising Covid-19 cases. Britain’s top medical adviser, Chris Whitty is expected to warn that the UK is at a critical point in the covid battle and faces a difficult winter in a briefing today. Cases are rising in what Prime Minister Boris Johnson has called a second wave. Large areas of the country have seen restrictions tighten and London is expected to be next.
Elsewhere, British manufacturers reported that V-shape recovery hopes were fanciful at best, reporting no evidence of such a recovery. Many are planning to slash business investment with BDO reporting investment intentions fell to -32% from -26%, almost the low seen in the financial crisis. The survey shows that despite the industry recovering from its April abyss, the return to normal trading will be a long haul.
On a more upbeat front, Chancellor Rishi Sunak has announced the extension of for different business support loans to help UK business affected by the coronavirus crisis.
After falling lower across the previous week, the US Dollar is trading on the back foot again at the start of the new week.
US – China concerns linger but are not provoking a risk off mood into the US Dollar after President Trump said that he approved the Oracle Corp’s bid for TikTok in concept. Trump’s efforts to ban the downloading of Chinese owned WeChat on Sunday have been paused by a US judge.
US Dollar investors will continue to watch for any signs of progress on a US rescue package. The Democrats and Republicans have failed to agree additional fiscal stimulus since the $600 additional unemployment benefit expired at the end of July.